Islamabad – Pakistan’s tax authority will introduce revised property valuation tables with increased rates from July 2024, under agreements reached with provinces.
The Federal Board of Revenue (FBR) secured consensus with all provinces on property valuations under the ‘Pakistan Raises Revenues’ project.
Updated tables come into effect in fiscal year 2024-25 to boost tax collection. The FBR notified provinces it will set around 85% property rates.
The $400 million World Bank loan supporting Pakistan’s revenue drive had timing and conditions adjusted.
Key changes include implementing digital data sharing in every province, and lifting the tax-to-GDP ratio from 8.5% to 8.8%.
Loan terms require the FBR to sign automatic data sharing Memorandums of Understanding with each of the four provinces, facilitating a unified taxpayer database.
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The WB project extends until June 2025 to raise FBR’s collection as percentage of GDP to 8.8% in 2025.
Customs clearance efficiency will now depend on real-time data, especially on goods declarations processed within 48 hours.
The FBR and provinces agreed input changes and digital sharing for sales tax to integrate federal and provincial sales taxes.
While provinces can levy services tax, the federal government handles goods sales tax. The FBR will draft MoUs on sales tax adjustments requiring federal and provincial approvals.
The WB will independently assess MoU compliance, although FBR-province deals will be confirmed internally.
The new property valuations and sales tax reforms aim to bolster Pakistan’s weak revenue as it battles economic crisis.
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