Islamabad: The Federal Board of Revenue (FBR) has proposed new regulations to ensure that real estate agents and jewellers keep a track of the records of individuals benefiting from the sale of property and jewellery — and to report any suspicious activities in their transactions to the tax authorities, according to news sources.
These measures have been proposed in a bid to meet with the requirements of the Financial Action Task Force (FATF). The FBR has already sent a draft proposing these amendments to the Income Tax Rules 2002.
In their assessment report, the FATF teams expressed their concerns that the real estate and jewellery sectors in Pakistan do not maintain sufficient record of transactions, and may be manipulated for money laundering.
The SRO 1320(1)2019 issued by the FBR states that the designated persons (DPs) will document all transactions that exceed PKR 2,000,000 in case of immovable property, and PKR 1,000,000 in other instances (all applicable taxes, duties and cess included).
These records will be subject to spot inspections by the income tax authorities, with possible assistance from the other law agencies under Section 178, Income Tax Ordinance 2002. In case of non-compliance, the DPs will be held responsible and will have their business licence suspended or cancelled, with the possibility of a further specialised investigation (depending on the recommendations of the investigating officer).
As per the new regulations, if the DPs suspect that their clients are making purchases using sources that are concealed from the authorities, then all such types of suspicious transactions are to be reported on the IRIS online tax system.