Tax experts told Business Recorder on Monday that the Central Board of Revenue (CBR) directive to Regional Commissioners of Income Tax (CITs) to examine the legal position of real estate business under Income Tax Ordinance 2001 was of no use.
Under the abolished wealth statement, every citizen was bound to submit details of total foreign investment. Wealth statement was the major tool to ascertain details of property of any person owned within Pakistan, UAE, UK or any other country.
If the wealth statement were applicable in the current circumstances, the CBR would not have faced problems in searching persons engaged in buying and selling of property.
They said that 'wealth statement' is obviously an issue of the past, but it could be discussed among tax managers like any other issue. However, no tax official is prepared to admit that 'wealth statement' is the only powerful tool for obtaining investment details of overseas Pakistanis.
It is surprising that the recently held Commissioner's Conference did not even discuss 'wealth statement', which was used for collecting property information in the past. On the other hand, a CBR report clearly admitted that despite best efforts on the part of investigators, the inquiry was not able to get the particulars of the people who were indulging in the purchase of property in Dubai mainly due to the resistance on the part of local agents and also because of legal provisions of Income Tax Ordinance 2001 being insufficient and ineffective.
Experts further pointed out that it was not clear why the CBR was interested in obtaining details of investment in property in UAE and UK. People have made huge investments in buying/selling property within the country during the last two years and CBR was unable to obtain any details about the investors. "Leaving local investors, the CBR focused on real estate business in Dubai and UK, which is not understandable. If CBR is much interested in obtaining details about investments in real estate business, it has to first focus on local investors and then go for investment made in other parts of the world," they said.