In a surprising reveal, Pakistan’s tax manager on Monday said there were hardly 12 Pakistanis who declared a wealth of RS10 billion ($ 36 million) or more in their returns – a statement showing the collapse of the tax engine and its inability to expand it narrow basis.

Federal Board of Revenue (FBR) Chairman Rashid Langrial made the statement in his defense to stop the financial transactions such as buying property, car or maintaining a bank account of unjustified persons, either filers or non-file.

“Only 12 people declared assets of more than RS10 billion in the last year, which is a huge under statement,” Langrial told the National Assembly’s standing committee’s subcommittee on the issue of proposed restrictions in the real estate sector.

The meeting was led by Bilal Azhar Kayani, a member of the National Assembly (MNA) who belonged to the Pakistani Muslim League-Nawaz (PML-N).

“Only 12 people with officially declared wealth of RS10 billion or more do not reflect the true wealth of Pakistanis. There are hundreds of housing communities in Pakistan and many dozens around Islamabad and Rawalpindi,” the FBR chairman continued.

India has over 100 richest people with net worth in billions of dollars. India’s 100. Richest person’s value is $ 3.3 billion, while its richest person –mukesh Ambanis net worth is $ 119.5 billion, according to Forbes.

“For the past 78 years, we have been running the country on excuses measuring to expand the tax base can undermine the economy, and it is not only FBR’s responsibility to expand the tax base and run the country’s system,” the chairman FBR noted.

Langrial emphasized that financial activities should have a connection with people’s personal wealth.

The government has suggested to disrupt financial transactions from people whose tax returns do not support such major purchases. There is also a suggestion that only these persons can buy the property whose declared assets can support such transactions. If the value of the declared asset is RS100, the buyer can buy a property of up to RS130 value, according to the proposal.

FBR should consider exempting the vote of up to RS50 million assets that allow the people to declare their assets, recommended ARIF HABIB. “The draft bill is very dangerous, and it leaves buyers and sellers of the property to grace of people ready to exploit,” he added.

Habib also said that companies were severely affected in recent times and the people who only invested in gold and dollars.

What is the need to introduce a proposal to stop purchasing properties of non -eligible persons when the people have the legal obligations to fil for their tax returns and wealth statements at the end of the financial year, Kayani noted the committee.

In the last financial year, slightly fewer than 1.7 million real estate transactions were carried out, and 93.7% transactions had a value of less than RS10 million, Langrial said. He added that there were only 2.5% transactions that would be affected by the new legislation.

“Our goal is to target 2.5% households only,” Langrial said. However, Ashfaq Tola, the President of Tola Associates – warned a tax advice company – FBR not to disrupt the system for 41,801 or 2.5% transactions.

FBR should not bring the entire property sector under the clouds for these few thousands of transactions, he said. Tola added that if FBR could not handle these 41,801 people without disturbing the whole system, there was a serious question of the system’s ability.

The FBR had shared the value short of the 1.7 million real estate transactions over the past year. Only 3,250 transactions that had a value of more than RS50 million were declared with the real estate registration authorities in the last year.

The actual prices are far higher than the declared values ​​for these properties at the time of registration, said MNA Jawad Hanid Khan.

FBR must first explain the results of the forces to block the SIM cards and disconnect the electricity and gas connections before asking for new forces, MNA Usama Ahmed Mela said.

Langrial said the tax could not be recovered by normal means until the entire system was changed, all officers of the FBR were honest and the civil laws were reformed. He admitted that there were thousands of people who bought properties every year, they were filers, but still did not reveal these assets in their returns.

“The decision to stop real estate transactions from unjustified persons would open up new opportunities for money laundering from Pakistan,” warned MNA Muhammad Mobeen Arif. Langrial replied that FBR was aware that the housing sector had been affected and “FBR has a role in it”.

To reverse the trend, he added, the government was seriously considering reducing tax on the real estate transactions subject to certain approvals.

Dr. Hamid Atiq Sarwar, member operations of FBR, said that during the first half of this financial year, 735,000 real estate transactions were carried out, of which 500,000 transactions were of the non-files. He said that mail purchases of asset revisions did not help, as the success rate was only 3%.

“The proposals are no longer in the hands of FBR, and it is now up to the standing committee what kind of decision it makes, Langrial said.

The sub -committee will meet again on Thursday to suggest a way forward.

It appeared during the discussion that the panel can recommend to the National Assembly that in the event that the property value was below RS10 million, there should be no requirement to justify the source of buying the property first.