The Federal Board of Revenue (FBR) is set to significantly increase property valuations across Pakistan, aiming to bring them closer to market rates. This move is part of the government’s broader strategy to enhance tax revenue collection.
Simultaneously, the FBR is finalizing the Tajir Dost Scheme, which introduces fixed monthly tax payments for small retailers and shopkeepers. These initiatives are designed to broaden the tax net and improve tax compliance within the country.
Property Valuation Update
Property valuations, which currently stand at around 75% of market rates, are expected to rise to approximately 90%. This adjustment will be implemented across more than 50 cities in the country. The FBR has been working on this revision since last year and is expected to finalize the new rates by September 1, 2024.
The increased property valuations will impact various taxes, including capital gains tax and withholding tax, which are calculated based on property values.
Tajir Dost Scheme
The FBR has introduced a simplified tax regime for small retailers and shopkeepers under the Tajir Dost Scheme. This scheme involves fixed monthly tax payments based on the location and size of the business. The goal is to bring more taxpayers into the formal economy.
To register under the Tajir Dost Scheme, individuals can use the Tax Asaan app or visit a tax facilitation center. The registration process is simplified and requires minimal documentation.
Expanding the Tax Net
By increasing property valuations and introducing the Tajir Dost Scheme, the FBR aims to broaden the tax net and improve revenue collection. The government recognizes the potential of the retail sector and is taking steps to integrate it more effectively into the tax system.
However, challenges remain in ensuring compliance and preventing tax evasion. The FBR will need to implement robust monitoring and enforcement mechanisms to achieve the desired results.
