As part of the recent budget measures, the Federal Board of Revenue – FBR to Set Property Valuation Rates Near to Market Rates, effective next month. This directive affects over 50 cities nationwide.
FBR Chairman Amjed Zubair Tiwana announced that the new rates would be finalized in the coming days. The revision process, initially delayed due to the involvement of tax officials in setting indicative incomes and tax rates for retailers, is now back on track.
Due to last year’s government change, property valuation rates remained unchanged. Currently, property values are approximately 75% of market value, but they are expected to rise to 90% under the new rates.
Since 2016, the FBR has been determining fair market prices for properties in major urban centers, with property valuations previously adjusted in 2018, 2019, 2021, and 2022. These revised property tables will be crucial for calculating federal taxes, including capital gains tax (CGT) and withholding tax.
Chairman Tiwana confirmed that the preliminary work for these revisions is complete, with the new rates set to be implemented by September 1. Official notifications will follow shortly.
Tajir Dost Scheme
In parallel, the FBR has introduced fixed monthly tax payments for small shopkeepers and retailers, as outlined in SRO 1024 of 2024. Depending on the location, the tax ranges from Rs100 to over Rs20,000 across 25,989 identified localities in 42 cities.
The scheme specifies market-wise indicative incomes and monthly advance taxes for small traders. It targets cities such as Islamabad, Karachi, Lahore, Peshawar, and Quetta, among others.
For small commercial spaces, including temporary shops or kiosks, an annual fixed advance tax of Rs1,200 applies. Monthly tax instalments for various shopkeepers range from Rs100 to Rs1,000, based on their shop’s fair market value.
All unregistered traders and shopkeepers must register under Section 181 of the Income Tax Ordinance, 2001. Registration can be completed through the Tajir Dost module in the Tax Asaan app, the FBR web portal, or tax facilitation centers, with the app available in Urdu and no registration fee required.
Despite the retail and wholesale sectors contributing 18% to the GDP, they account for only 4% of tax revenue. The government aims to integrate these sectors more effectively into the tax net, striving for better compliance and revenue generation.
