SEP 25, 2018: A money whitening scheme allowed on property purchase has documented black money worth Rs230 billion (US$1.9 billion) till end of the last fiscal year ending June 30, 2018.
The money has been whitened during December 2016 through June 2018.
The government on December 02, 2016 through amendment by inserting a new section 236W to Income Tax Ordinance, 2001, had approved the immunity and allowed investments in immovable property to document their money at the rate of 3 percent.
The declarer of concealed income was also granted immunity from disclosing the source of income.
As a result of this immunity the declaration of concealed income amounted to Rs80 billion during December 2016 – June 30, 2017. Further an amount of Rs150 billion was whitened under the scheme during July 01, 2017 – June 30, 2018.
The FBR collected Rs7 billion as tax revenue at the rate of three percent of the declared amount.
Sources said that the immunity was only allowed on investment which was difference between provincial value and valuation table issued by the FBR.
However, where the provincial value is greater than the FBR valuation, the immunity was applicable.
In the budget 2018/2019, the parliament withdrew the scheme and introduced new mechanism for property valuation and announced setting up a directorate of immovable properties in the FBR. The directorate has been mandated to takeover properties, in case of suppressed values, by paying higher amount against the declared amount from the buyer.
The new mechanism has to be implemented from July 01, 2018 but FBR failed to set the directorate. Therefore the immunity from declaring concealed income continues till the establishment of the directorate.