Islamabad: The Pakistan Government has recently proposed a 5% federal excise duty (FED) on the sale and purchase of new plots, encompassing both residential and commercial properties. This significant measure was introduced by Finance Minister Muhammad Aurangzeb during his budget speech on Wednesday, as part of the latest fiscal policy aimed at regulating the real estate sector.
According to the details, this 5% FED is designed to curb speculative activities that often lead to volatile property prices and market instability. By imposing this duty, the government hopes to create a more stable and transparent real estate market. This initiative is also expected to generate additional revenue for the state, which can be reinvested into public services and infrastructure.
In addition to the FED, the government is contemplating a gradual increase in the withholding tax rate for the sale and purchase of immovable property. This adjustment will be based on the investment amount, with higher rates potentially applicable to larger transactions. Such measures are part of broader efforts to ensure that the real estate market operates fairly and that all transactions are properly documented and taxed.
To further enhance transparency and streamline processes within the real estate sector, the government announced several technological initiatives. One of the key projects is the digitization of E-Registry and property transfer services. This digital transformation is expected to reduce paperwork, minimize errors, and speed up transaction times, making the process more efficient for buyers and sellers alike.
Another innovative measure is the introduction of a QR code payment mechanism at cattle markets. This system is aimed at preventing tax evasion by ensuring that all transactions are recorded and monitored electronically. The use of QR codes will help the authorities track payments and verify the authenticity of transactions, thereby reducing the likelihood of fraud and tax evasion.
In addition to these initiatives, the upcoming budget includes new taxes on non-filers and individuals who do not file their tax returns. By imposing higher taxes on non-filers, the government aims to encourage tax compliance and deter illegal transactions. These measures are designed to enhance transparency, promote fair practices, and curb fraudulent activities in the real estate market.
Overall, these comprehensive steps reflect the Pakistan Government’s commitment to regulating the real estate sector and ensuring that it operates transparently and fairly. The proposed 5% FED, along with the digitization efforts and tax compliance measures, are expected to have a significant impact on the market, benefiting both the economy and the public.
