FBR considering changing RTO's jurisdiction for CVT collection to outside Karachi

KARACHI (November 10 2009): The Federal Board of Revenue (FBR) is planning to make suitable amendments in the jurisdiction of Regional Tax Offices (RTOs) to start assertive monitoring of the Capital Value Tax (CVT).

Sources told Business Recorder on Monday that the issue was picked up on the recommendation of the Director General, Intelligence and Investigation.

He suggested to the board to identify additional areas to the RTOs in the definition of urban area as per provisions of 7(1)(e)(iv) of the Finance Act, 1989. They said that he was of the view that the additional areas needed to be identified to cover the mushroom growth of housing schemes beyond existing rating areas.

The proposal is very apt but board will have to extend the jurisdiction of RTO, Karachi beyond the civil limits of the city as any additional areas to be included will actually be part of RTO, Quetta, Hyderabad or Sukkur. In order to cover additional areas beyond rating areas in the definition of urban areas, it may consider re-invoking the additional band of 40km in case of Karachi, which was included in the definition of urban areas under section 7(1)(e) prior to its substitution by Finance Act, 2008.

They further said that if a suitable amendments were made by the board, all additional real estate activity taking place beyond the border of Karachi would be added in the urban area of the metropolitan. They said that board has also decided posting its officers at all CVT deduction stations to monitor the CVT transactions made at the big business hubs in particular and at remote areas in general.

They said that the board has expanded its CVT deduction stations across the country as over 400 more stations are going to be established at all tehsils. Sources said that board is striving to enhance the CVT collection manifold, which presently dropped by 31 percent, and added that the officials who would be posted at the registrar offices, would also assist them in the deduction of the CVT because board has received immense complains against registrars, who reportedly miscalculated the CVT at old rate on the recorded value at both commercial and residential areas.

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