The Central Board of Revenue (CBR) has decided to approach the Government of United Arab Emirates (UAE) for obtaining the details of the Pakistani nationals, who have made investment in the real estate business in the UAE.
Official sources told Business Recorder on Sunday that the CBR would obtain the relevant information from the UAE government under the convention on the avoidance of double taxation and the prevention of fiscal evasion. The income tax department has taken the decision on failure to obtain information from the local sources including agents of foreign companies.
The data pertaining to purchase of property in UAE would help the CBR to pinpoint potential Pakistani investors, who are out of the tax net. The details of the Pakistani national, who have purchased property in the UAE would be taken from the UAE government, officials added.
The CBR had tried to obtain the details of such investors from UAE, UK and other countries. The department had also directed the Commissioners of Income Tax (CITs) to collect information about the people making huge investment in the real estate business in UAE.
However, the concerned promoters were reluctant to submit the details to the income tax department. Even a Regional Commissioner of Income Tax (RCIT), Islamabad has given a report on the issue saying that the details of the Pakistani buyers in UAE could not be obtained by the department.
The investigation revealed that companies were based at Dubai and not having a single office in Pakistan, have persuaded people in Pakistan to invest in the real estate sector of the UAE or other countries, including UK. The promoters give attractive advertisements about the properties in Dubai and London.
The promoters are usually Dubai-based businessmen and the services of local firms were hired to brief visitors and investors.
IN ONE OFFER, THE INVESTMENT IN THE REAL ESTATE SECTOR OF DUBAI WAS AS FOLLOWS: furnished studio apartment 285,000 dirhams onwards, one bedroom apartment from dirhams 415,000 onwards and retail shop dirhams 750 per square foot.
However, the CBR remained unable to trace their permanent establishment in Pakistan and all transactions of the promoters seemed to be direct with the buyers. For making payment of property, the money could be transferred directly by the buyer in the account of the company or they were more than eager to transfer the funds through money changers. However, the promoters prefer cash payment in any currency at their office at Dubai through Hundi, sources maintained.
The RCIT has informed the CBR that the provisions of Income Tax Ordinance of 2001 being weak rather non-existent while questioning international money transfers further encourages such deals, sources stated.
Despite the best efforts of the income tax department, the concerned officials remained unable to get the particulars of the people who indulged in the purchase of property in Dubai mainly due to the resistance on the part of local agents and also because of the legal provisions being insufficient and ineffective, sources added.
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