LAHORE - The Punjab Board of Revenue apprehended that tax amnesty scheme announced by Prime Minister Shahid Khaqan Abbasi would face teething troubles as Centre and provinces have not worked on the mechanism for purchasing properties misdeclared in new transactions after the abolishment of DC rates.
The board feared that absence of this mechanism would encourage corrupt elements of government departments involved in price-fixing and purchasing of the properties.
The scheme is aimed at generating actual revenue from land transactions as people show less value of their property while registering the deeds to avoid taxes. The PM had announced it while giving details on the amnesty scheme.
The PM Khaqan Abbasi had reportedly said that the tax to be collected on all property transactions to be made uniform. The state will have the right to purchase any property by paying 100pc above its declared rates within six months of its registration, he held.
Moreover, the government will monitor citizens' financial records and issue notices if they find evidence of tax evasion. The provincial bigwigs held a meeting in recent days to discuss the PM's announcements regarding property issues.
Official sources in the treasury privy to the development revealed that at a high-level meeting - chaired by Provincial Finance Minister Dr Aisha Ghous Pasha and attended by the Senior Member Board of Revenue (SMBR) Aslam Kamboh, Secretary Finance Hamid Yaqoob Shaikh and others - discussed the procedure to acquire private lands on double rates from the owners mideclared in tax returns or assets.
The premier's statement that the federal government will withdraw its evaluation table (Capital Value Tax) and the provinces should also end DC rates was discussed. Both SMBR Aslam Kambo and Finance Minister Dr Pasha though agreed to the extent that the department's reservations will be conveyed to the federal government. The participants agreed that it was the provinces prerogative to deal with the registry of lands issue.
Requesting anonymity, a former SMBR said that the PM's announcement of acquiring private lands on double prices would open a window for corruption.
"The board said at present no concrete information is available to handle procedure of acquiring private properties and then sell them at high rates," the officer said. A new department will have to be established to implement the amnesty scheme as the board had no capacity to deal with it, he added.
Responding a query how the scheme announcement would give birth to corruption, the officer said: "besides the sub-registrar office, the BOR and the FBR officials would be involved in the process of acquiring of private lands and then to auction them".
Moreover, the government officers would take a long way and time to acquire private lands and then to dispose of them. The rate of the bribe in the BOR, the sub-registrar office, and the FBR would escalate. The private parties would be issued notices on their private properties and in return high rates of bribe will pay their way.
Akram Bhatti, who deals tax and land matters said that the government decision is not viable at all. Not only the federal laws but the provincial one like the Stamp Act 1899 will be repealed to implement the new laws.
He said that the law of DC rates was in place since the British Rule that guaranteed both the government taxes and the people's rights to sell their properties at minimum rates.
Akram said "If federal and provincial governments make new laws to implement the newly announced policy without considering the ground facts it would decrease revenue from government taxes and promote using of backdoor channels or corruption to one's safeguard interests."
