In a significant move aimed at attracting more overseas investment in Pakistan’s real estate sector, the Federal Board of Revenue (FBR) has announced that overseas Pakistanis will be exempt from paying higher taxes on property transactions. This exemption is in accordance with Sections 236C and 236K of the Income Tax Ordinance, 2001. This new policy comes as a relief to non-resident Pakistanis, even if they are not listed on the Active Taxpayers List (ATL).
The FBR’s latest decision is expected to simplify the process for overseas Pakistanis who want to invest in Pakistan’s growing real estate market. The move will also help to eliminate hurdles that had previously discouraged overseas Pakistanis from engaging in property transactions back home.
Key Details:
- Who’s Eligible?
Overseas Pakistanis who hold a Pakistan Origin Card (POC) or a National ID Card for Overseas Pakistanis (NICOP) can now benefit from this tax exemption. - How to Apply?
The FBR has set up a simple online process through its IRIS platform. Non-resident Pakistanis just need to upload their POC or NICOP details when generating their Computerized Payment Receipt (CPR). The system will automatically create a provisional number and start the verification process, which takes one business day to complete. - Nationwide Availability:
This system is available at all major tax offices across Pakistan, ensuring that all eligible overseas Pakistanis can access the exemption.
Impact on Overseas Property Investment:
This exemption is set to have a profound impact on Pakistan’s real estate market. By removing the burden of high taxes, the FBR aims to make property transactions more affordable and accessible for overseas Pakistanis. The move is expected to encourage increased property investments, which will benefit both residential and commercial real estate sectors.
- Attracting Investment: The policy is likely to attract more overseas Pakistanis to invest in residential and commercial properties across the country. By eliminating the additional financial burden, the market becomes more appealing for foreign investors.
- Boost to Real Estate Market: The real estate sector stands to gain from the influx of investment, which will contribute to the overall economic growth of Pakistan. More investments will lead to new projects, infrastructure development, and potential job creation.
- Ease of Doing Business: With a faster, digital process for tax exemption, overseas Pakistanis can now make property purchases without facing bureaucratic hurdles. This change enhances Pakistan’s position as an investment destination, making it easier for non-resident citizens to engage in property transactions.
How the Process Works:
Overseas Pakistanis wishing to benefit from this exemption can follow these steps:
- Upload POC/NICOP Details: Non-resident taxpayers will need to upload their POC or NICOP information through the IRIS platform when generating a Computerized Payment Receipt (CPR).
- Generate PSID: The system will generate a provisional PSID (Payment Slip Identification Number) to initiate the verification process.
- Verification Process: The verification is carried out in two stages. Initially, the Chief Commissioners of Inland Revenue (CCIRs) review the applications, and later the Commissioners of Inland Revenue (CIRs) provide final approval.
- Approval Notification: Once the verification process is complete, applicants will receive notifications via SMS and email.
A Step Towards Simplified Taxation for Overseas Pakistanis
This initiative by the FBR is a major step in simplifying the tax process for overseas Pakistanis. The introduction of the digital verification system through IRIS will not only reduce bureaucratic delays but also increase transparency in the tax exemption process.
For non-resident Pakistanis, this means less time spent on paperwork and faster processing of property transactions. The FBR’s digital approach reflects the government’s commitment to creating a more investor-friendly environment and modernizing the country’s tax system.
Conclusion
The FBR’s decision to exempt overseas Pakistanis from higher real estate taxes is a significant development that will help rejuvenate the property market. The policy simplifies the process for non-resident Pakistanis, making it easier and faster for them to invest in Pakistan’s real estate sector. This move is expected to generate more investment, boost the economy, and further strengthen ties with the Pakistani diaspora.
As the real estate market continues to evolve, this step by the FBR demonstrates the government’s ongoing efforts to promote investment and streamline the investment process for overseas Pakistanis.
Source: This information was originally published by Pakistan Today on December 27, 2024. For more details, get the source article here.