Realty tax collection falls 29%

According to The Express Tribune, the realty segment's income tax receipts slid 29 per cent to Rs28 billion across July and August of this fiscal year. Over the same two months, the salaried class contributed Rs91 billion, an increase of Rs6.3 billion from the prior year. The newspaper contrasted this with the 50 per cent tax concession that property activity received in the latest budget.

Withholding on property sales fell to Rs18.4 billion from Rs27 billion, a drop of 32 per cent, after the budget set a single 2.75 per cent rate against 5.5 per cent. Tax on property purchases declined 22 per cent to Rs9.7 billion, as the rate dropped from 2.5 per cent to 1.25 per cent. Despite expected growth in property transactions, the sector paid Rs11.2 billion less than a year earlier.

The report also said wholesalers and retailers paid Rs12 billion in withholding tax, which was Rs440 million lower than last year. It added that FBR fell short of its August target by Rs27 billion, with almost flat growth. These figures challenge the impression given by tax authorities that retail collection has jumped.