Haven't declared the correct value of your property? Pakistan govt may be coming for you

If you have shown the value of your assets to be less than what they are actually worth in your wealth statement submitted to the tax collection authority, you may be in some trouble.

A senior official informed Nukta on Tuesday that the Federal Board of Revenue (FBR) is planning to introduce a new format in wealth statements to be filed along with annual returns, through which every taxpayer has to disclose the fair market value of each asset alongside the cost of acquiring that asset.

This will help in recognizing the true value of assets held by a person and depict the exact increase in the assets of a taxpayer. In addition, this will provide the government an option to buy the assets at the declared value if the asset's value is shown to be too low by the taxpayer, he added.

Taxpayers tend to show a property's value as far lower than it is actually is in their wealth statement submitted to the FBR so they can evade taxes, the official said.

He shared that right now, there are three ways to determine a property's value.

The first is through District Collector Rates — the minimum property valuation prices that determine the value of stamp duty to be collected on property.

The second is the FBR's own system. And the third is the fair market rate at which real estate transactions actually take place.

According to the official, the FBR is considering amending the laws to grant the government the authority to buy taxpayers properties at the value they have shown if it is found to be too low compared to its fair market value.