ISLAMABAD: SC of Pakistan has granted interim relief against the deemed income tax on real estate.
In a recent decision, a special bench headed by the Chief Justice of Pakistan, Justice Umar Ata Bandial, has granted interim relief to taxpayers in Pakistan. The bench allowed taxpayers to pay only 50% of the assessed deemed income tax until the apex court made a final decision. The court also criticized the performance of the Federal Board of Revenue (FBR) and its focus on an already limited taxpayer base to achieve targets.
The FBR prohibits taking any adverse action against taxpayers who have deposited half of the assessed tax. The case was filed by the realty and manufacturing sectors against Section 7E, which was introduced by the government in June last year to impose tariffs on people who derived income equal to 5% of the fair market value of capital assets situated in Pakistan, charging them at the rate of 20%. The FBR argued that the effective tax rate is only 1%, aimed at collecting additional revenue of Rs.15 billion. The interim decision raises concerns about the FBR’s ability to meet the government’s annual tax collection target of Rs. 7.640 trillion. For the latest Real Estate News and Blogs, visit Realtors blogs.