Strict Property Purchase Limited for Non-filers in Pakistan
The Federal Board of Revenue (FBR) is preparing to put tighter limits on the amount non-filers can spend on the purchase of property under the proposed Finance Bill 202526. This is as a follow up to broader measures by the government to widen the tax net.
At a recent Senate Standing Committee on Finance meeting chaired by Senator Saleem Mandviwala the FBR officials stated that the initial limit of 130% of declared assets was proposed to limit the number of non-filers purchasing property. The committee has however agreed to a revised proposal wherein it raises the maximum amount applicable to non-filers to 500% of reported assets.
Property Purchase Limits are Tighter for Non-filers:
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The senator, Mohsin Aziz supported the rise because the initial cap was too confined. A non-filer who has a declared asset of Rs 10 million can carry a transaction of up to Rs 50 million of real estate. The proposal was accepted, and the 500% limit was passed by the committee.
The reason behind such a cap is that purchases are related to the stated assets by individuals who are not required to pay income tax. It admittedly discourages overbuying properties and automobiles. The government is still determined to cut down on paperwork and bring more individuals into the official tax base. Finance Minister Muhammad Aurangzeb who briefed the committee on fines increased last year on non-filers.
Also Read: Announcement of Massive Tax Relief for the Real Estate Market
In a related measure, the FBR has also proposed that the limit imposed on non-filers by daily withdrawals of tax-free cash be increased by 50,000 to 75,000. Withholding tax would change to 0.8% over this limit as opposed to the former rate of 0.6% on amounts below this limit. The idea behind the step is to negate the unreported financial activities and encourage formal banking transactions.
These recommendations are included in the broader fiscal plan in next year’s budget, which aims at raising revenues by enhancing enforcement and compliance activities.
