BySindh has taken a significant stride in fostering transparency and improving tax compliance by initiating real-time property transaction data sharing with the Federal Board of Revenue (FBR). This progressive step, launched on January 18, 2025, underscores the government’s commitment to formalizing Pakistan’s real estate sector, historically one of the largest contributors to the informal economy.
The Board of Revenue (BOR) Sindh has implemented an online streaming mechanism to ensure that comprehensive details of property transactions are immediately accessible to the FBR. According to insiders, the system provides instant updates on transactions, including crucial information about buyers and sellers, such as their tax filer status. This real-time data allows the FBR to monitor high-value transactions and investigate the origins of funds used, with a specific focus on identifying non-filers and curbing tax evasion.
The real estate sector in Pakistan has long been a hotspot for unregulated financial activities. Despite its substantial contributions to the economy, it has also been a significant part of the grey economy, raising concerns about undocumented wealth. To address this, the FBR has amplified its efforts to identify individuals with taxable income who remain outside the formal tax system. The new collaboration with Sindh enhances the FBR’s ability to track and target such individuals effectively.
As part of its efforts to formalize the property market, the FBR has enforced stringent measures, including mandating that transactions exceeding specific thresholds be conducted through banking channels. This policy aims to promote financial transparency and restrict the circulation of unregulated funds in the sector.
Additionally, the FBR has recently revised property valuation rates in Karachi, bringing them closer to market values. This revision aims to reduce the gap between declared and actual property prices, significantly increasing revenue collection from the real estate sector. The move is seen as a complementary measure to the data-sharing mechanism, ensuring a more robust fiscal framework.
The integration of property transaction data into the FBR’s systems is a milestone in the government’s broader strategy to formalize the economy. By closing regulatory gaps and leveraging technology, the FBR is better equipped to tackle tax evasion. This development is expected to bring more individuals into the tax net, enhancing revenue generation and contributing to a more transparent and accountable economic environment.
Through initiatives like these, Sindh and the FBR are setting a precedent for other provinces to adopt similar measures, paving the way for a more documented and equitable economic system in Pakistan.
