FBR Redefines Property Tax Law on Defaulters
Immovable Property Sales Prohibited Until Tax Liability is Cleared
In a bid to strengthen tax compliance and boost revenue collection, the Federal Board of Revenue (FBR) FBR Redefines Property Tax Law on Defaulters has taken a revised step. Under Section 7E of the Income Tax Ordinance, 2001. The FBR has now prohibited individuals with outstanding tax liability from selling immovable properties.
According to official sources within the FBR, this decisive move comes in the wake of a crucial amendment introduced through the Finance Act of 2023. The primary objective of this amendment is to compel tax defaulters to fulfill their income tax obligations promptly. The law amendment is dedicatedly purposed at Section 236C of the Income Tax Ordinance, 2001. It will deal with withholding tax from sellers of immovable properties during the sale or transfer registration process.
Implication of the Law
The amendment for property tax defaulters will effect from July 1, 2023. It states that any person responsible for registering, recording, or attesting the transfer of an immovable property is now prohibite from carrying out such transactions unless the seller or transferor has cleared their property tax liability under Section 7E.
The latest amendment is part of the government’s broader efforts to streamline the tax collection process and broaden the tax base. By targeting immovable property transactions, which often involve significant sums of money, the FBR aims to discourage tax evasion and ensure that individuals meet their tax obligations responsibly.
Anti-Tax Theft Move
The FBR’s decision has been welcome by many, who see it as a positive step towards combating tax evasion. And promoting a fair and transparent taxation system. However, some experts caution that rigorous implementation and monitoring will be essential. To ensure that the new measure achieves its desired outcomes without causing any unintended negative consequences for the real estate market or genuine property sellers.
The FBR’s move to disallow the sale of immovable properties for tax defaulters is a bold and proactive measure. In the pursuit of revenue collection and tax compliance. By holding individuals accountable for their tax liabilities. The government aims to foster a culture of responsible tax payment and strengthen Pakistan’s financial situation.