FBR to increase property valuation rates by 90% to boost tax revenue M Haris

The Federal Board of Revenue (FBR) informed the Senate Standing Committee on Finance that property valuations in major urban centres will be increased from 75% to 90% of the market rate starting July 2024. 

This adjustment is projected to generate an additional Rs70 billion in the next fiscal year.

Out of the Rs70 billion, Rs30 billion is expected to come from the increased property valuations, while Rs40 billion will be collected through higher withholding tax on the revised valuations and new withholding tax rates.

FBR’s Member Inland Revenue (IR) Operation, Mir Badshah Wazir, stated that the valuation rates of properties will be revised soon after the approval of the budget 2024-25. 

The federal government sets property valuations in certain cities to collect withholding tax. Previously, the government charged a 3% income tax on property sales and purchases from tax filers, while non-filers faced rates of 6% on sales and 10.5% on purchases.

In addition to property valuation adjustments, the FBR plans to introduce a simplified scheme for retailers after the failure of the voluntary Tajir Dost Scheme.

During the Senate committee’s meeting, the FBR officials also highlighted severe human resource constraints, with 6,000 of the 18,000 sanctioned posts currently vacant. “We need help to fill the vacant posts,” said the FBR Member IR Operation.