FBR launches system to facilitate overseas Pakistanis’ investment in real estate

The Federal Board of Revenue (FBR) has rolled out a digital system to grant tax exemptions to overseas Pakistanis investing in the real estate sector.

This initiative, enacted through the Finance Act of 2022, aims to provide tax relief to non-resident Pakistanis.

Under the new provision, non-resident individuals holding a Pakistan Origin Card (POC) or a National ID Card for Overseas Pakistanis (NICOP) are exempt from high tax rates under sections 236C and 236K, even if they are not listed in the Active Taxpayers List (ATL).

To facilitate this exemption, the FBR has introduced a new process in the IRIS System. Non-resident taxpayers must upload their POC or NICOP while creating the Computerized Payment Receipt (CPR). A provisional Payment Slip ID (PSID) will then be generated and sent to the login of the concerned Chief Commissioner of Inland Revenue (CCIR).

The CCIR will forward the case to the Commissioner of Inland Revenue (CIR) for verification of the non-resident status. Once verified, the taxpayer will be notified via SMS or email about the approval, allowing them to benefit from the exemption.

Earlier this month, the FBR issued instructions to Chief Commissioners of Inland Revenue (CCIRs) to expedite property transactions for overseas Pakistanis, ensuring that the verification and approval process is completed within a single business day.

This initiative is part of the FBR’s continued efforts to streamline the process for overseas Pakistanis involved in real estate transactions, making it more efficient and accessible.

The FBR aims to make these exemptions more easily accessible and efficient, thus encouraging expatriates to invest in the Pakistani real estate market.

Despite recent stagnation in Pakistan's real estate sector, it remains one of the most lucrative for both local and overseas investors, offering the potential for speedy and abnormal returns in a short span of time.

In related news, workers’ remittances recorded an inflow of $2.9 billion during November 2024, marking a 29.1 percent year-on-year increase. Cumulatively, with an inflow of $14.8 billion, workers’ remittances increased by 33.6 percent during July-November FY25 compared to $11.1 billion received during the same period in FY24.

By November 2024, overseas Pakistanis had deposited and invested a total of $9.139 billion through the Roshan Digital Account (RDA).

From September 2020 to November 2024, net investments amounted to $1.189 billion.

Out of this, $426 million went into conventional Naya Pakistan Certificates (NPCs), $712 million into Islamic NPCs, $51 million into Roshan equity investments, and $37 million into other liabilities. There was also $427 million left in the accounts.