FBR to Increase Property Taxes from July 2024; Details inside

Islamabad: The Federal Board of Revenue (FBR) has successfully negotiated agreements with all provinces regarding the valuation of immovable properties as part of the “Pakistan Raises Revenues” campaign. Updated valuation tables will be put into effect from the fiscal year 2024-25 onwards, aiming to improve revenue generation.

Additionally, the tax machinery has agreed with provinces that rates notified by them for immovable properties will be approximately 85 percent determined by FBR itself. Plans are in place to implement the revised valuation tables from July 1, 2024.

The World Bank (WB) and Pakistan have changed the timing and Disbursement Linked Indicators (DLI) for a $400 million loan intended to boost Pakistan’s income generation efforts. Key changes include raising the tax-to-GDP ratio from 8.5 percent to 8.8 percent and implementing digital data-sharing efforts in all provinces.

According to the loan terms, the Federal Board of Revenue (FBR) is required to develop Memorandums of Understanding (MoUs) for automatic data exchange with all four provinces, easing the creation of a unified taxpayer database.

The timeframe for the WB’s “Pakistan Raises Revenues” project has been extended to June 2025 to increase FBR’s total collection as a percentage of GDP to 8.8 percent in FY25.

Customs clearance procedures at borders will now be evaluated based on real-time data, specifically goods declarations cleared within 48 hours. This indicator will be renamed “Efficiency in Customs Clearance of Key Exports and Imports.”

Read more: SIFC Gives Approval for FBR Reforms & Strategic Canals Vision 2030

Regarding General Sales Tax (GST), agreements have been reached between the FBR and provinces on input adjustments and digital data-sharing systems to ensure the accuracy and reliability of data. Harmonization of GST and GST on Services (GSTS) has also been achieved.

The responsibility for GST on goods lies with the Center while GST on services is the prerogative of the provinces. The FBR will prepare MoUs and agreements on GST input adjustments, subject to endorsement by the Ministry of Finance with support from the Ministry of Inter-Provincial Coordination.

While agreements between the FBR and provinces will be verified internally, the World Bank will conduct its own review of the MoUs with the provinces to ensure compliance and effectiveness.