Lahore - The amendment made to Section 68 of the Income Tax Ordinance 2001 through the Finance Act 2016 will have a long-term impact and people, especially the Income Tax returns filers, will have to face the consequences after one year.

Apparently the purpose of this amendment is to document the black money in property and construction sectors, but actually it will open new avenues of corruption. “This particular amendment must be immediately revoked, as it will open more avenues of corruption while property valuation,” observed LCCI former vice president Kashif Anwar.

Talking to The Nation on Saturday, he said it was very sad that provisions of the budget 2016-17 were not in favour of the construction industry, with which more than 50 industries were attached.

“With boom in the construction activities, the economic circle automatically moves,” he added.

“Duties and taxes on many items related to the construction industry have been increased like on marble, cement, steel, boards etc. Capital gain tax on the disposal of property, tax on builders and withholding tax on the sale and purchase of property has been increased which will have a negative impact on the growth of this sector,” he apprehended.

Anwar said that the previous system for property valuation through a pre-defined category-wise table must continue, but this property valuation table needed to be revised more frequently and more categories should also be added to it.

“It is a matter of grave concern that under the amendment, a new mechanism will be introduced, which will bound the investors to get their properties evaluated by the evaluators of State Bank of Pakistan (SBP), which will then be referred to FBR’s Inland Revenue Department,” he said, and added,

“This is not a sensible move as SBP lacks expertise in this particular field and this will trigger an unprecedented corruption even in State Bank which is a less corrupt organisation.”

He urged the government to take decision at the earliest in this regard because this amendment had come into force from July 1, 2016, causing immense problems for the buyers and sellers of immovable properties.

He recalled that in the past, the Excise & Taxation Officer was deployed at the office of a sub-registrar, where the registry of property was only being done after the formal signatures of Excise & Taxation officer who negotiated with buyers for property valuation.

Experts suggest that instead of introducing an imprudent amendment in Section 68 of the Income Tax Ordinance 2001, the government should leave the existing system intact whereas the rates mentioning property valuation table should be revised after thoroughly surveying the market, while more categories should also be added, and this revision should be done more frequently after a period of at least two to three years.