The Defence Housing Authorities (DHAs) and real estate registration office in the provinces are reluctant to provide property buying/selling data to the income tax authorities for brining them into the tax net.
Sources told Business Recorder on Monday that Karachi and Lahore Medium Taxpayer Units (MTUs) commissioners have expressed serious concern over the non-cooperation of the provincial registration authorities during the last national tax conference held in Islamabad. Both the commissioners underlined the practical problems being faced by the tax officials in obtaining data from the provincial registration authorities.
The Commissioner of Income Tax (CIT), MTU, Karachi, said the DHA Karachi and other 12-13 provincial registration authorities have suspended online transfer of property transaction data to the medium taxpayer unit for which software was provided to the provincial registration departments.
As soon as the DHA transfers any registry, the data is immediately transferred to the database maintained by the MTU Karachi. Through this exercise, the income tax department collects information about potential taxpayers, who are out of the tax net. These persons have purchased expensive property, but were operating in the undocumented sector.
Provincial authorities had provided the information to the income tax department for one week and suddenly discontinued the practice. Sources said the Commissioner MTU, Lahore, also informed the conference that the DHA Lahore have also refused to provide any kind of information about property transfers to the regional tax authorities.
The CBR chairman has directed the officials concerned to procure a computer programme for online transfer of data from provincial registrars in all major cities.
Sources said that necessary data is available with the CBR to bring the potential taxpayers into the tax net. But its enforcement is difficult. It requires courage to serve notices to the influential persons persuading them to file income tax returns under section 114 of the Income Tax Ordinance, 2001.
The board wanted to computerise data on investment in real estate, land record and approved construction plans available with the municipal and development authorities. The data on immovable property would also include computerised identity card numbers (CNIC) of the buyer/seller. This also included monitoring of capital value tax (CVT) collection on the immovable property situated in urban area, measuring at least one kanal or 500 square yards whichever is less; commercial immovable property and residential flats having covered area measuring 1,500 sq. feet and above.
In this regard, the CBR is also obtaining Computerised National Identity Card Numbers (CNICs) of the real estate purchases for compilation of a national database on real estate sector. The CBR has repeatedly issued instructions to the field formations to obtain information regarding investment inclusive of NIC/CNIC of the purchasers for a consolidated database at the CBR level.