Real estate amnesty scheme faces audit

ISLAMABAD:

The federal government has decided to audit the completion certificates submitted by builders and developers who benefited from the amnesty scheme offered for the real estate sector during the PTI’s rule.

In this regard, the Federal Board of Revenue (FBR) has notified the chartered accountancy companies rated satisfactory after their quality control review by the Institute of Chartered Accountants in Pakistan (ICAP).

The beneficiaries of the amnesty scheme were not asked about their sources of income, and they were also given tax exemptions and concessions to the tune of billions of rupees.

When contacted, a senior officer of the FBR revealed that during the PTI’s rule, the tax amnesty scheme was introduced for developers and builders completing projects within a specified period in the real estate sector.

Under this amnesty scheme, eligibility criteria were established for developers and builders to avail tax exemptions and concessions. According to the criteria, developers and builders were required to have sold at least fifty percent of the plots and completed the sale proceedings for at least forty percent of the plots, houses, or flats.

Similarly, it was necessary for developers and builders to obtain certificates from the National Engineering Services Pakistan (Nespak) regarding completion of road infrastructure for at least fifty percent of residential and commercial projects.

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In accordance with these eligibility criteria, developers and builders were mandated to obtain compliance certificates, and it was obligatory to verify these certificates from the chartered accountancy firms rated satisfactory by ICAP after quality control review.

Officials said the legal requirements for verifying the completion certificates of real estate sector investors benefiting from the amnesty scheme were not fulfilled as the FBR did not notify the audit firms rated satisfactory by ICAP.

They said in order to fulfill this legal requirement, the FBR has now certified the chartered accountant companies rated satisfactory by ICAP to validate the completion certificates.

The firms that received a satisfactory rating in ICAP’s quality control review after September 30, 2023, will be able to attest to the completion certificate submitted by the builders and developers who benefited from the amnesty scheme.

The builders and developers whose certificates are verified will continue to get tax relief. However, if the completion certificates cannot be verified or if they do not meet the eligibility criteria, they will not be granted tax relief.

Additionally, taxes will be levied against them, and legal action will be taken in accordance with the law. They may also be questioned about their sources of income.