FBR ups plots’ valuation rates by 15-25pc

ISLAMABAD: In a major move, the Federal Board of Revenue (FBR) has jacked up valuation rates of real estate plots in the range of 15 to 25 percent on average in all major cities of the country in a bid to increase tax collection up to Rs75 billion.In some posh areas of Karachi, the FBR has jacked up valuation rate in different ranges starting from 15 percent and going up to 110 percent depending on the locality of the city.When contacted former Chairman Association of Builders and Developers (ABAD) Arif Jeeva on Friday night for seeking his comments, he said that the FBR increased valuation rates up to 110 percent for DHA phase 7 and 8 in Karachi while in other areas of the metropolitan the valuation rates increased in the range of 15 to 25 percent on average.At a time when the FBR has been facing shortfall of Rs188 billion in first seven months (July-Jan) period of the current fiscal year, the FBR took this major step and increased valuation rates for all major 20 cities of the country.When contacted, FBR Member Inland Revenue Service (IRS) Policy Hamid Ateeq Sarwar on Friday confirmed that the valuation rates jacked up on average in the range of 15 to 25 percent. “We hope that the tax collection on property can go up from projected Rs50 billion level to Rs70-75 billion with this raise in valuation rates,” he added.However, the sources said that the valuation rates were revised upward from 40 to 60 percent on average and the FBR intended to increase the rates further in next financial year probably in July 2019 in order to narrow down the difference between market value and valuation rates notified by the FBR. “We want to increase our valuation rates close to 80 percent of market value in all major 20 cities of the country,” said the official.The FBR issued valuation rates for Karachi, Lahore, Rawalpindi, Islamabad, Faisalabad, Hyderabad, Jhelum, Jhang, Gujrat, Gujranwala, Bhawalpur, Abbottabad, Peshawar, Mardan, Quetta, Sahiwal, Sargodha, Sialkot and Sakkhar. For Karachi, the real estate categories increased from 9 to 11 and for immoveable property in Karachi, Hyderabad and Sakkhar, the properties were divided into seven categories.The FBR had started valuation rates during the tenure of last PML-N-led regime in August 2016, and after holding hectic negotiations with different players of real estate it was somewhat raised. However, the last N-led government had revised downward some valuation rates in January 2018 for which the FBR had to face criticism that it was done to please voters just ahead of elections. However, the FBR has now again jacked up valuation rates for all major 20 cities but still there was difference between the valuation rates notified by the FBR and existing market rates. “There is still gap of 40 percent and in second expected jerk in July the FBR will further increase valuation rates in order to remove existing distortions among the market rate, DC rates notified by the provinces and valuation rates notified by the FBR,” concluded the official.

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