ISLAMABAD – The Federal Board of Revenue (FBR) has proposed changes tocompletely document the businesses of real estate agents and jewellers.
In order to comply with the Financial Action Task Force’s (FATF)requirements, FBR issued draft amendments to Income Tax Rules 2002 forensuring documentation of real estate agents and jewelers.
The board has issued special instructions regarding account books,documents, and records maintained by real estate agents/jewelers andreporting of suspicious transactions. They will now be required to maintainrecords of actual beneficial owners of immovable properties and jewelry andreport all suspicious transactions of their buyers/sellers to the FBR.
It is pertinent to mention here that the FATF teams were concerned that thereal estate and jewelry sectors are totally undocumented and can becometools of money laundering and terror financing in Pakistan.
According to the FBR, the jewelers and real estate agents (named asdesignated persons or DPs) are to keep a record of transactions where thevalue of the transaction, inclusive of all applicable taxes, duties, rates,and cess exceeds, Rs. 2,000,000 in case of immovable property and Rs.1,000,000 in other cases.
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Under the monitoring and compliance provisions, the record to be maintainedand furnished by the real estate agents/jewelers shall be subject to spotinspection by income tax authorities who may be assisted by other lawenforcement agencies. If the record is not maintained in the prescribedform, the business license of the real estate agents/jewelers shall besuspended, pending further investigation into the matter.
If the real estate agents/jewelers fail to comply with any of these rules,they shall be liable to penalty under Part X and prosecution under Part XIof Chapter X of the Income Tax Ordinance.
On the conclusion of the investigation, the officer may submit a report tothe commissioner and make recommendations, regarding, cancellation orreinstatement of the business license. He may refer the matter tospecialized external investigating agencies for further investigation undertheir respective laws.
