Mohsin Siddiqui (Chief Reporter)

FTO’s order, the FBR is required to establish a standing anomaly committee to address stakeholder grievances related to property valuation issues. Additionally, the FBR has been directed to develop a comprehensive standing operating procedure (SOP) outlining suitable methods for the valuation of immovable properties.

The FTO emphasizes the immediate functionalization of the Directorate General of Immovable Property, established under section 230F through the Finance Act, 2018. The non-functional status of the Directorate has been identified as a hindrance to proper property valuation, and its activation is crucial for establishing an appropriate framework.

The FTO initiated an own-motion investigation into discrepancies and deficiencies in SRO.1271(I)/2022, citing it as lopsided, flawed, and deficient. These issues, if unaddressed, pose obstacles to the transparent and coherent implementation of tax laws in the real estate sector, potentially leading to revenue loss.

It is highlighted that the international donor agencies have a keen interest in the real estate sector due to its high revenue potential and to curb manipulation and money laundering in real estate transactions. The FBR’s inattention and inadequacy in addressing these issues leave room for the influence of provincial and FBR’s field staff.

Previously, the FTO had directed the FBR to activate the Directorate General of Immovable Property (DGIP) to rectify discrepancies and anomalies in the FBR’s valuation tables of immovable properties. Despite the creation of the DGIP in 2018, it became dysfunctional in 2019, with the FBR Policy Wing handling its responsibilities and making errors in the valuation tables.

The FBR Policy Wing’s failure to engage professional valuers has led to the notification of defective property values, resulting in mistakes in the SROs issued by the FBR concerning the valuation tables of immovable properties.