The Federal Board of Revenue (FBR) has announced to suspend unregistered real estate agents by January 1st, 2022. The government is tightening the noose on who can do property deals by introducing a registration system for real estate agents in Pakistan. The country has been on the FATF’s grey list for deficiencies in its counter-terror financing and anti-money laundering regimes. Pakistan has taken swift steps towards improving its AML/CFT regime.

Recently, the FBR has announced a mandatory condition for real estate agents to get registered as Designated Non-Financial Businesses and Professions (DNFBPs) under the Anti Money Laundering Act 2010 (AMLA 2010). The FBR prevents the offences of money laundering, predicate offences, or financing of terrorism by DNFBs through imposing conditions under the relevant provisions of the AMLA, 2010. The tax department further added that no public or private development authority shall conduct the business activity with any real estate agent for the transfer or registration of immovable property unless the real estate agent is registered with the FBR as a DNFBP. Any violation of this condition shall attract the penalty provision under AML Act 2010 and AML/CFT sanction rules 2020.

The government has made substantial progress in making its counter-terrorist financing systems stronger and more effective. Pakistan has made progress, but It needs to exit the grey list because a potential downgrade to the blacklist can have serious implications for the country. Being on the blacklist means the country’s banking system will be regarded as one with poor controls over AML and CFT.

Work on the Naya Pakistan Housing Program remains stalled due to a price hike of essential construction items. It is now becoming a major challenge for Naya Pakistan Housing and Development Authority (NAPHDA) to provide housing units for poor and needy people. Even though the housing crisis is a growing concern for the incumbent government, not even a single brick has been laid so far by NAPHDA itself, a corporation established to deliver 5 million housing units to the citizens.

NAPHDA acquired a hefty loan of Rs 80 billion from the State Bank of Pakistan to subsidise housing units for the poor. The increase in the construction cost affected the development of the Housing Program. The essentials needed for the construction of a house, including labour, cement, brick, and barring, have shown a 40 percent increase from 2018 to date. The government is trying to increase the subsidies for buyers and incentivise the builders to execute the programme.

NAPHDA acts as an umbrella that oversees all those projects. It is only responsible for giving clients to the builders and spotting out the most deserving ones (poor people) to be awarded housing units. It also creates employment opportunities for both skilled and unskilled human resources.

According to the Minister for Planning, Development, and Special initiatives, Asad Umar, the Government has taken concrete measures to bring the rural areas of Islamabad at par with its urban areas through the provision of all basic facilities to the people. Prime Minister Imran Khan has also constituted Islamabad’s master plan commission which is working on a plan to end the difference between rural and urban areas in terms of urban facilities.

The government has also ensured a 50% quota of the residents of Islamabad in federal jobs from grade 1 to 15. Many development projects in the federal capital have already been completed including Rawal Dam Interchange, G-7 underpass, Burma bridge, Kiani bridge, Malal bridge, and the PWD Interchange.

Poor quality of life and low basic facilities of rural areas highlights the need for development in the rural sector. The development of rural areas is important for the growth and prosperity of Pakistan. The Islamabad master plan commission has planned to reconstruct around 50 to 55% of rural areas of Islamabad by June 2022

The district administration has registered 1,252 Kanal prime land in the name of three persons. The societies were registered without collection of over Rs 350 million mandatory capital value tax (CVT). CVT is payable by individuals, firms, and companies which acquire an asset by purchase or a right to use for more than 20 years.

Taxation is important for many aspects of an economy’s growth. Collecting taxes and fees is a fundamental way for countries to generate public revenues that make it possible to finance investments in human capital, infrastructure, and the provision of services for citizens and businesses. Tax evasion results in lower revenue for the government that places greater constraints on government spending on public goods and services, hurting economic growth.

The Federal Investigation Agency (FIA) has initiated an inquiry into the allegations of tax evasion, illegal extension, and commercialization by housing societies. The legal and judicial system should provide the right incentives to prevent tax evasion, and tax agencies and their auditing teams should play a crucial role in identifying and punishing offenders.

The government of Punjab has taken the decision to withdraw the increase in property tax. Punjab Minister for Excise and Taxation Hafiz Mumtaz Ahmad and Secretory Waqas Ali have played important roles in it. The withdrawal of an increase in the property tax will provide relief to the business community.

To raise tax revenues, the Punjab government had previously decided to increase property taxes. The government had increased the commercial property tax from 10 percent to 300 percent per annum in its federal and provincial budgets for 2021-22. The Lahore Chamber of Commerce and Industry (LCCI) and small traders started protesting the hike in property tax and demanded that the government withdraw the increase in the property tax. According to the president of LCCI, they were only protesting the unfair taxation and will be open to paying taxes otherwise. Chief Minister of Punjab Usman Buzdaar has accepted the recommendation of LLCI to reverse the property tax hike and ease the problems of the business community.

This decision comes as a good omen as the business community is already facing challenges due to rupee depreciation, an increase in the key policy rate, and soaring inflation. The reversal of the hike would help build trust in the government and promote public-private partnerships (PPP).