Islamabad, February 16, 2025 – Rashid Mahmood Langrial, Chairman of the Federal Board of Revenue (FBR), has firmly denied any plans to introduce a tax amnesty scheme for property transactions. His statement comes in response to increasing speculation about potential relaxations in income disclosure requirements related to real estate investments.
During a televised interview, the FBR chairman addressed concerns about possible relaxations in the disclosure of income for individuals purchasing immovable property. “There is no discussion at any level to grant any relaxation in the disclosure of income for the purchase of immovable property. Allowing such a relaxation would essentially amount to an amnesty,” Langrial emphasized. He further clarified that this issue had not been brought up in the meetings of the Prime Minister’s task force.
Despite these strong remarks, reports have suggested that the Prime Minister’s task force has recommended waiving wealth reconciliation requirements for property investments and transactions within the real estate and construction sectors, up to a threshold of Rs 50 million. These recommendations have sparked concerns that the government may be indirectly laying the groundwork for a tax amnesty on property transactions.
While Langrial has strongly rejected the idea of offering any form of amnesty, he acknowledged the pressing challenges posed by the current tax system, particularly with regard to property transactions. He confirmed that the FBR is actively reviewing the possibility of lowering the advance tax rates on the sale and purchase of immovable properties. This move, he stated, is intended to encourage greater transparency in property dealings and improve tax compliance within the real estate sector.
The task force’s recommendations also include several significant policy shifts aimed at simplifying the tax regime and encouraging investment in the real estate sector. Among these proposals is the potential abolition of Section 7E of the Income Tax Ordinance, 2001, which has been a point of contention in property taxation. Furthermore, the task force has advocated for the removal of the Capital Value Tax (CVT) in Islamabad, a move that could reduce the tax burden on real estate transactions and stimulate market activity.
Another noteworthy suggestion from the task force is the updating of property valuations every three years to align more closely with market rates, which could address discrepancies between the assessed value of properties and their actual market value. Additionally, the task force has recommended certain exemptions from transaction taxes for specific groups, including low-cost housing projects, government-allocated plots, and first-time homebuyers.
Despite the changes being proposed, the FBR’s position remains firm on rejecting any form of tax amnesty for property transactions. Langrial reiterated that the FBR’s main goal is to enhance transparency, broaden the tax base, and improve compliance without resorting to the use of amnesty schemes. He stressed the importance of fair taxation policies and emphasized the need for long-term solutions to strengthen the real estate sector and the broader economy.
While the tax amnesty issue continues to stir debate, the FBR is committed to pursuing reforms that streamline taxation and foster growth in Pakistan’s real estate sector, all while ensuring that these changes do not undermine efforts to increase tax collection and transparency across the economy. The government’s focus remains on creating a more equitable system that promotes compliance and long-term economic stability.