ISLAMABAD -  The National Assembly's Standing Committee on Finance and Revenue on Tuesday approved an amnesty scheme for the real estate sector, according to which realtors will have to pay only three percent tax for declaring their hidden assets in purchasing properties.

The committee has approved the recommendations of its sub-committee. The sub-committee proposed three percent rate for one-time tax amnesty for whitening money invested in this sector under which three percent tax will be charged between declared value of DC rates and price tables notified by the Federal Board of Revenue (FBR).

The committee also proposed that the federal government should charge one percent in total for withholding tax, advance tax and capital gain tax (CGT) from both buyers and sellers. The federal government would charge three percent to six percent and capital gain tax on FBR value or one percent of fair market value, whichever is higher. This one percent would be inconclusive of all advance/adjustable federal government taxes including CGT.

The committee also recommended that areas where the FBR has done valuation on higher side should be rectified immediately with consent of the stakeholders. The government would incorporate the recommendations in the Income Tax (Amendment) Bill, 2016 (Ordinance No.XLIX of 2001) bill.

The subcommittee observed that activity in real estate sector has virtually stopped, construction projects were quickly feeling the negative impact and more than 50 affiliated industries such as cement, steel, paints etc are being affected severely. It has also noted that overseas Pakistanis investment in real estate sector has slowed down significantly and capital flight to other investment avenues such as UAE has been started.

It is worth mentioning here that the government had introduced amendments in the Income Tax Ordinance in the budget to collect taxes on property transactions. However, later, due to the resistance from real sector, the government promulgated an ordinance with consensus of property dealers and introduced fair market value. Realty sector backtracked from their agreement and refused to pay taxes on the rates they already agreed. They had asked the government to reduce the taxes and given opportunity to declare their hidden assets.

The National Assembly's committee has also suggested reducing the interest rate to seven percent on agriculture loan. The committee members noted that traders and industrialists are getting loans at six percent, as against 12.5 percent markup on agriculture loan. The officials of the Zarai Taraqiati Bank Limited (ZTBL) informed the committee that they are taking less interest rate than other banks, as they are providing loans at 15 percent rate.

Committee member Mian Abdul Manan said that other countries are taking only six percent interest rate from farmers. After thread bear briefing by the ZTBL president on the performance and functioning of ZTBL for last three years. The Committee strongly recommended that interest ratio on agricultural loans should be reviewed and support package may also be given to the farmers.

The committee recommended that the auditor general of Pakistan may be requested for the auditing of National Testing Service (NTS) funds. The committee further recommended that Securities & Exchange Commission of Pakistan (SECP) may be directed to inquired the matter of funds in detail. The committee also directed to NTS CEO for reducing the fee charges.

Members of National Assembly Muhammad Pervaiz Malik, Dr Shizra Mansab Ali Khan, Sheikh Fayyazud Din, Mian Abdul Mannan, Leila Khan, Dr Nafisa Shah, Syed Naveed Qamar, Abdul Rashid Godil, Sher Akbar Khan, Siraj Muhammad Khan were present in the meeting, besides the senior officers from Ministry of Finance & Revenue, FBR, State Bank of Pakistan, ZTBL, SECP, NTS.