The National Board of Revenue chairman Ghulam Hussain on Tuesday blasted the real estate and housing developers for committing undervaluation of prices of land and apartments during registration to evade taxes. The NBR chief also raised questions for not reducing the prices of land and apartments though realtors were getting huge tax break.At a pre-budget discussion with entrepreneurs of construction sector, he said that the revenue board had been providing tax benefits to the real estate and housing sector but people were not getting any benefits due to high price of land and apartments.
He made the comment in reply to a demand of Real Estate and Housing Association of Bangladesh for continuation the scope of legalising undisclosed money through investment in the sector for the next 5 years and reduction of taxes related to registration.
‘The NBR has been losing huge amount of taxes just because of undervaluation of prices of lands and apartments during registration,’ he said.
For example, 1-katha land in Gulshan and Banani is being sold at Tk 10 crore but the price of land is shown at just Tk 52 lakh during registration, he pointed out.
The revenue board was supposed to get Tk 1 crore as tax if the transaction would made in actual price but it got only Tk 5.2 lakh because of undervaluation, he added.
‘You will show the price of Tk 10 crore-land at Tk 52 lakh, and on the other hand will request to reduce the gain tax though the tax is paid by property owners,’ he commented.
Will the developers make transaction in actual price if the NBR reduces the tax, he asked.
The NBR chief said that last year, the revenue board provided huge tax break to the sector in keeping with the tax policy considering the consumers’ interest, but it could not yield any result as the price of land remained higher and continuously kept on increasing.
The NBR will have to analyse the reasons why the tax benefit is not reflected in pricing of land and apartment, he said.
At the meeting, REHAB demanded continuation of black money investment facility in the sector saying that people did not make any investment in the current year due to political unrest in the country.
‘The facility which was given in the current fiscal year is needed to be continued for 5 more years to boost the sales of apartments,’ REHAB vice-president Liakat Ali Bhuiyan said.
The association also demanded reduction in income tax on transfer of per square metre residential land, buildings and apartments to Tk 1,000, Tk 800 and Tk 500 respectively from existing Tk 1,600, Tk 1,500 and Tk 600 for areas divided in three different categories.
The REHAB also proposed to reduce tax on transfer of commercial land, buildings and apartments to Tk 5,000, Tk 3,000 and Tk 1,000 respectively from the existing Tk 6,500, Tk 5,000 and Tk 1,600 for three different categories.
It also sought reduction of gain tax, stamp duty, registration fee and value-added tax in registration of plot and flat to 6.5 per cent from the existing 11.50 per cent.
REHAB also recommended that the government should introduce secondary market for trading flats and plots at reduced tax.
At the meeting, Bangladesh Land Developers Association echoed with the proposals of REHAB.
At the meeting, Bangladesh Auto Re-Rolling and Steel Mills Association demanded that the NBR should increase customs duty on import of MS Billet to Tk 5,500 per tonne from the existing Tk 3,500 per tonne to save the local industry.
It also proposed to reduce duty on import of raw materials used in re-rolling and steel mills.
Steel Building Manufacturers Association of Bangladesh sought reduction of duty on import of colour sheet used in pre-fabricated building industry.
Bangladesh Cement Manufacturers Association wanted reduction of duty in import of raw materials including clinker and fly ash for the sector.
NBR members Farid Uddin, Syed Aminul Karim and Jahangir Hossain, among others, were present at the meeting.
-With New Age input
