FBR's excessive valuation of immovable properties under fire by FTO

FBR's excessive valuation of immovable properties under fire by FTO

By: Communicators - Business Team (July 11, 2024)

The issue of excessive valuation of immovable properties by Federal Board of Revenue (FBR) has been questioned by Federal Tax Ombudsman (FTO) and Member Inland Revenue (Policy) has been instructed to prioritize the correction of certain errors. The FTO's recent order mandates that the relevant authority should engage with stakeholders and the complainant to address grievances about the high property valuations and revise the valuation table if necessary. Key directives from the FTO include:

• Addressing the complainant's pending application dated July 10, 2023, on its merits, providing an opportunity for a hearing in accordance with the law, and reporting compliance within 60 days.

• Developing Standard Operating Procedures (SOPs) for valuing immovable properties.

• Constituting standing anomaly committees at appropriate levels to handle stakeholders' grievances regarding valuation issues.

• Hiring competent and experienced evaluators for property valuation to ensure transparency and accuracy.

• Formulating a schedule for periodic revisions of the valuation tables.

The complaint in question pertains to the high valuation mentioned in FBR notification No. 1180(1)12022 dated July 27, 2022, for Agro Farms CDA Scheme-Ill, Sihala, Islamabad. The complainant, a lessee of a plot in the scheme, argued that the valuation was unrealistic and excessively high. The FTO's findings revealed significant shortcomings in the FBR's valuation process, such as:

• Lack of efforts and methods by field formations and valuation committees.

• Absence of a standing anomaly committee to address stakeholders' concerns.

• Non-functional relevant Directorate General.

• Inconsistencies and inappropriate valuations leading to maladministration as defined in the FTO Ordinance, 2000.

The valuation for Agro Farms, Scheme-Ill, was notably increased from Rs. 2 million per kanal to Rs. 4 million per kanal. The department claimed this valuation was done after consulting property dealers, builders, and developers but failed to provide details on the committee's composition or minutes of the meetings. Additionally, the department could not explain the method used for the property valuation, leading to further dissatisfaction from the complainant.

The FTO's recommendations aim to rectify these issues by ensuring a more structured and transparent approach to property valuation and addressing the stakeholders' grievances efficiently.