Non-filers to Face Extra Property Tax in Upcoming Budget!

• Pakistani government plans to raise advance tax on property purchases by non-filers to boost revenue.
• Aim is to discourage non-compliance and increase tax revenues from the real estate sector.
• IMF recommends structural reforms, including blocking SIM cards of non-filers, to broaden the

In a move aimed at bolstering revenue and curbing non-compliance, the Pakistani government is gearing up to tighten regulations on non-filers, particularly in the realm of real estate transactions. The proposed strategy involves raising the advance tax on the purchase of immovable properties by non-filers, signaling a concerted effort to enhance tax collection and fiscal discipline.

This decision aligns with a new understanding forged between the Federal Board of Revenue (FBR) and the International Monetary Fund (IMF), highlighting Pakistan's commitment to implementing robust fiscal policies and meeting international financial obligations. The anticipated increase in withholding tax on property acquisitions by non-filers is expected to yield substantial revenue, potentially exceeding Rs 100 billion in the upcoming fiscal year.

Proposed Property Tax in Pakistan

The primary objective behind this initiative is to dissuade non-compliance and promote greater tax compliance within the real estate sector. With Pakistan actively seeking additional financial assistance from the IMF, there is a heightened emphasis on tapping into previously untapped segments to broaden the tax base and strengthen the country's fiscal position.

Property Value	Tax Rate for Filers	Tax Rate for Non-Filers
Up to 50 million	3 percent	6-7percent
Between 50-100 million	4 percent	12percent
Over 100 million	5 percent	15percent

Furthermore, as part of the broader reform agenda, the government has pledged to introduce structural changes, including measures such as blocking the mobile SIM cards of non-filers. These measures are designed to enforce accountability and incentivize tax compliance among individuals and entities operating within Pakistan's economic landscape.

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Currently, tax authorities impose a 3 percent levy on filers and a 10.5 percent tax on non-filers in real estate transactions, generating significant revenue amounting to Rs 80 billion in the current fiscal year. The IMF's recommendation to further increase the advance tax rate for non-filers underscores the government's commitment to enhancing tax revenues and fostering a culture of fiscal responsibility across all sectors of the economy.