16/11/2014
KARACHI: The Federal Board of Revenue (FBR) has collected the data of 100,000 transactions in the real estate business in Karachi and identified the involvement of black money in them to the tune of trillions of rupees, official sources said.
The sources said the Regional Tax Office (RTO) Karachi has submitted the details obtained from Sindh government regarding the transactions of immoveable property – which had taken place in the past five years in the jurisdiction of municipal corporations in Karachi.
“The forms of capital value tax (CVT) of such transactions have been obtained. Out of which 24,000 have been scanned and submitted to the FBR’s central data,” an official at RTO Karachi said on condition not to be named.
The details of remaining transactions were under the scanning process and would be submitted to the board for inclusion in the central database, the official added.
The sources said that the tax officials would access the information in the central database for the thorough investigation.
About the quantum of revenue involved in undeclared investment in the real estate business, the tax officials said that it was difficult to determine the actual number but the declared investment as per the collector’s rate in 24,000 transactions was about Rs17 billion whereas the actual investment as per the open market rates, which were not declared, was at about Rs115 billion.
It is worth mentioning that the RTO Karachi recently gathered the details of 11,600 open plots regarding sales and purchases within the jurisdiction of DHA Karachi. The latest information gathered by the RTO Karachi from Sindh government is apart from the details of DHA plots.
The sources said that the FBR would take action against the persons who misdeclared the investment details under Section 111 of Income Tax Ordinance, 2001 regarding undisclosed income.
The RTO Karachi will send details of about 300,000 transactions of the past five years made in Karachi, which are in the process of finalisation.
The latest drive was started on the directives of Tariq Bajwa, chairman of FBR, to bring people not on the tax roll and to tax the black economy – mainly from tax evasion, malpractice, corruption, illicit drug trafficking etc.
Another FBR official said that the low collector’s rate of properties fixed by the provincial governments had provided a gateway for the black economy in the country.
The official said that data gathered through work-back basis on withholding tax on cash withdrawal revealed that Rs6.22 trillion were withdrawn from the banking system during 2012-13 when the withdrawal limit was enhanced to Rs50,000 against Rs6.265 trillion in 2011-12 at the withdrawal of Rs25,000.
The official said that such huge amount was not documented and the same would go in the real estate business, UAE markets or be sent abroad through Hawala or Hundi.
In order to eliminate tax evasion and culture of black money the provincial governments should increase collector rates.
The FBR officials urged the chairman to discuss with other authorities regarding the issues, including elimination of exemption that was unnecessarily granted to capital markets for the protection of undisclosed income/black economy.
