In a landmark move, the Federal Board of Revenue (FBR) has announced a significant tax exemption for overseas Pakistanis looking to invest in the real estate market back home. This policy shift is aimed at encouraging the diaspora to contribute to Pakistan’s economic growth through property investment without the burden of additional taxes.
As remittances continue to play a crucial role in Pakistan’s economy, facilitating easier investment options for expatriates is seen as a strategic step to harness this potential. This blog post explores the details of the new tax exemption, its implications for overseas Pakistanis, and how it might change the landscape of property investment in Pakistan.
Tax Exemption for Overseas Pakistanis: A New Directive by FBR
The Federal Board of Revenue (FBR) has recently introduced a policy providing significant tax relief for overseas Pakistanis who wish to invest in property in Pakistan. This move is designed to simplify the process of purchasing property without the need for physical presence in the country.
Simplified Procedures for Tax Exemption
Overseas Pakistanis are no longer required to be physically present to handle property purchase transactions. They can now generate a PSID code by themselves, which must be forwarded to the relevant chief commissioner of inland revenue via email. This step simplifies the process, making it more accessible for non-residents to invest in Pakistani real estate.
Verification and Approval Process
The procedure includes a verification process where the relevant commissioner will check the status of non-resident Pakistanis through NICOP and approve it based on merit. Upon approval, overseas Pakistanis will be eligible to receive tax exemptions that could save them millions of rupees when purchasing property in Pakistan.
Role of Federal Tax Ombudsman
It’s worth noting that the Federal Tax Ombudsman (FTO), Dr. Asif Mehmood Jah, had previously directed FBR to ensure that taxes paid by overseas Pakistanis on property transactions are refunded, underlining the importance of this demographic in supporting Pakistan’s economy.
Streamlined Processing by FBR
To expedite and streamline the exemption process, FBR has instructed all chief commissioners of inland revenue to process all cases of overseas Pakistanis within a single day. This directive aims to facilitate quick processing and reduce bureaucratic delays.
Summary
With these new regulations, FBR is actively working to encourage more investments from the Pakistani diaspora by making the property buying process more favorable and financially appealing. This is expected to boost economic growth and enhance the real estate market’s attractiveness to overseas investors.
