The Federal Board of Revenue (FBR) has received directives from the Federal Tax Ombudsman (FTO) to revamp the valuation process for housing schemes in upscale areas in real-time.
The objective behind this directive is to establish precise valuation tables for immovable properties, ensuring that they accurately reflect the prevailing market rates and conditions.
The need for this change emerged as the FBR recognized issues in the proposed rates put forward by the Regional Tax Office (RTO) in Multan. These discrepancies resulted in properties being undervalued, thereby affecting the assessment of taxes.
Furthermore, the existing valuation tables lacked clear distinctions between residential, commercial, and agricultural properties, posing additional challenges in property valuation.
Additionally, some residential schemes introduced by real estate developers were not included in the valuation table. In light of these shortcomings, the RTO has pledged to rectify these issues in the forthcoming valuation table, which will be formally notified by the FBR.
It’s crucial to understand that the current valuation process for immovable properties is a component of the Pakistan Raises Revenue Projects (PRRO) initiative, a taxation reform program established under the guidance of the World Bank. This initiative, executed by tax authorities, is designed to create a consistent and reliable valuation table for immovable properties. It is subject to regular evaluation and review by the various Regional Tax Offices (RTOs) to ensure that it aligns with current market conditions and requirements.
The recent directive from the FTO underscores the importance of accurate and up-to-date valuation processes for properties, particularly in prestigious areas, where market dynamics can fluctuate rapidly. This decision by the FTO serves as a reminder of the continuous efforts and reforms being undertaken in the tax and revenue sector, with the aim of promoting fairness, accuracy, and transparency in property valuation.