FBR launches 'Ad Alerts'

Directorate General of Intelligence and Investigation Federal Board of Revenue has launched a new intelligence product called "Advertisement Alerts" for collection of information about transactions taking place in the economy from leading print/electronic media sources to be cross-matched with the FBR database to check their tax status.
Sources told Business Recorder here on Tuesday that the first sector picked for "Advertisement Alerts" is real estate where 'Alerts' have been issued to Regional Tax Office-III (RTO) Karachi and RTO Islamabad. Certain big marketing companies of real estate sector and construction contractors/builders are not even on the tax-roll of the FBR which resulted in issuance of "Advertisement Alerts" to the field formations. One of the leading Islamabad-based real estate marketing companies claims to be the biggest real estate marketing company in Pakistan with a network of offices in USA, Canada and Europe remains a non-filer of the tax returns as per the FBR database.
Within real estate sector of Islamabad, there is a newly launched housing project for certain government employees. The present venture is located on Islamabad Highway at the intersection of Zone IV and Zone V, 3 Kms from the Benazir International Airport and 12 Kms from Islamabad Club. The charge of FED needs to be determined for excessive advertisement/marketing of the said housing project of Islamabad. The returns of advertising and marketing limited company may also be enforced along with withholding statements required under the law, sources maintained.
Another concern in the development of the housing project in Islamabad is the planning and design company, which is principal project consultant responsible for strategic development, town planning and engineering design services for the project in Islamabad. This unit is not on the tax-roll of the FBR database.
An enterprise is another concern associated with the housing project of Islamabad. It is a manufacturing and construction company. They are specialist builders, land developers, contractors and marketing managers. It is also engaged in the affiliated project. The enterprise is also not on the tax-roll of the FBR.
Details revealed that the "Advertisement Alerts" would check whether or not tax compliance has been properly made by real estate sector and other key sectors of the economy. Extended outreach of media in recent times has transcended its ambit beyond providing information and entertainment. Media has now become an effective organ of economy, impacting on businesses and transactions in a variety of ways. Advertisement is one such vehicle where businesses utilise the extended access of media to popularise their products among the public. In this sense, media advertisements could rightly be termed the pulse of major transactions taking place in the economy. Unfortunately, aforesaid vital source of information for reining in non-compliance and wilful tax evasion has remained grossly under-utilized so far.
For the said exercise the agency has chosen real estate sector because it has emerged as the most vibrant sector of economy in the past decade. The sector has absorbed billions of investments. The most amazing feature of the sector is its robustness whereby it has withstood the overall trends of growth and decline in the economy and continued its phenomenal expansion. However, despite this sustained proliferation, contribution of the sector in terms of revenue is negligible.
In fact, hardly any effort has been made to gauge the actual size of the real estate sector and its actual and potential contribution to the national exchequer in the shape of government taxes. The undocumented and untaxed transactions in the sector have reduced the sector to a segment of black economy, which has successfully evaded the payment of its due share of taxes.
Another index of the untaxed nature of the sector is the fact that it has become the refuge for all undocumented and untaxed investments emanating from the other sectors of national economy. Of the numerous players currently engaged in the sector are real estate land owners (government being one of them) on whose land development is made; developers/investors who develop land and sell property (including govt. and semi-govt. departments housing societies) construction contractors/builders who construct houses and commercial ventures for individuals, government and communities; construction machinery owners/operators; banks and financial institutions who provide money and finance various transactions in the sector; architects, engineers and labour contractors.
Other included manufacturers and distributors of construction material such cement manufacturers, stone crushers, tile manufacturers, sanitary and other fittings manufacturers, real estate agents/property dealers who act as middle man but pocket substantial profit from the transactions taking place in the sector. Other included small and large scale contractors providing services to Government, individuals and other misc. actors such as stamp vendors, rent collectors, etc.