Tax Filer Or Non-Filer, Who Is Better In

Tax Filer or Non-Filer, Who is Better in Property Buy and Sell

This year the budget has brought many new dimensions in property buying and selling. People have started investing their think tanks to crawl over and understand the latest taxations. The queries that probably arise are somehow like these;

Let us discuss each query in greater detail for better understanding and for bringing us out from the state of oblivion and limbo. 

The whole scenario that had created is not very old. The present government is trying to discover maximum aspects to bring tax into the running economy so that the system could run a healthy span. While doing so, two major steps are being taken which correlate the Real Estate sector the most. One is a revaluation of immovable properties in 21 major cities of Pakistan and another is the efforts to bring non-filers in light and influence them to be tax return filers. While discussing above mentioned queries, I hope we would come to any conclusion and discuss the effecting factors too which have brought a drastic change in Real Estate Sector.

With the change in the FBR valuation of immovable properties, the government has intervened after many years to bring just to the taxation for the property. People used to show less amount on legal documents just to elude taxations (WHT, CGT, etc.). At this point in time, our nation severely needs funds to run the country’s economy, and in long run, these taxes would definitely pay us back in form of better education, medical treatments, and infrastructure.

In the meantime, another step has been taken to bring every earning citizen under the tax return filer domain. The dire need for it occurred because only 20 thousand traders were registered before the amnesty scheme announced in June 2019. It means that several thousand companies are not registered and if they are, they are not paying sufficient taxes to show their complete earnings. The tax holdups have jeopardized the nation to such an extent that the government seeks loans from the IMF and other resources to regulate the infrastructure.

The amnesty scheme 2019 will end on June 2020, till then there is ample time to get registered and later on the surcharge will be imposed on non-filers ranging from 10% to 40% on their properties. So to elude these circumstances it is a better idea to be a filer.

As observed, there are several pros and cons to be a tax return filer, let us see them in greater detail to understand our standings in society.

1. Tax filer has to pay less With Holding Tax that is 1% only for immovable property. The non-filers have no legal standings now and they have to face prosecution any time by FBR and court of law.
2. The taxpayer would have to pay a 5.5% tax on import of any raw material whereas the non-filers have to pay 8%.
3. Non-filers are not eligible to owe a property rate of more than 5 million PKR. If the non-filer is eager to retain those properties more than 5 million they have to register them in FBR.
4. The filer only pays a 6% duty on export on a commercial scale, on the other hand, the non-filer needs to pay a 9% duty on exports.

There are other benefits observed such as a total of 20% tax is accountable on the dividends of non-filers and the 15% tax rate is set for tax filers. Tax filers would only be responsible for 15% tax upon winning prize money through prize bond whereas the non-filers will pay 25% Tax. On any judicial criminological arrest, the filers would attain a B-class jail but the non-filers would get C-class cell.

In the long run, the filers are more secure and benefited then non-filers. In the real estate sector, the property prices are expected to become more valued and with this notion, the immovable property would pay you more than any other type of investment. The change in taxation and valuation has brought about many gossips but ultimately they will end up in a more secure and reliable Real Estate Sector.

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