The Federal Board of Revenue (FBR) is considering to grant power of additional commissioner, capital value tax (CVT) of detecting concealed transfers transactions attracting CVT to income tax (IT) inspectors to monitor the levy at source.
Sources told Business Recorder on Wednesday that Regional Tax Office (RTO), Karachi, had brought the issue in limelight, recommending to the board to grant the said power of additional commissioner, CVT, to IT inspectors, CVT. RTO said that this function can be performed by IT inspectors, who will make spot visit at the registering authority to examine its register to determine CVT evasion.
Sources said that if the board wants to plug CVT leakage, the following power should be added to the job description of the IT inspectors, CVT, which would enable them to perform CVT audit of registration authority to detect cases of concealed transfer transactions attracting the levy.
They said the register of property transfer could only be computerised if the columns in the register were broken down further. Similarly, the CVT-1 form also captures the same data in respect of seller of the same property, which should only be incorporated in the register.
They said that only 25,000 property transactions took place in Civil Division of Karachi because of slow property market in Tax Year 2009. But it was over 0.1 million annually during peak in 2002 to 2004. They said the department has also suggested to the board to electronically maintain CVT registers and challans as the information gathered from CVT-1 form is not only monitored for proper collection of CVT but it is also useful for next 5 years.
They said that officers have not been assigned any specific CVT collection targets, and added that the department is expected to reach Rs 1 billion mark, as compared to Rs 500.264 million collected last year. They further said the CVT collection totally depends upon the number of property transfer transactions, which could vary according to overall economic condition of the country.