ISLAMABAD: The real estate sector has warned of a serious setback to investments in Prime Minister Imran Khan’s priority construction sector due to planned inspections of offices of the property dealers, developers and investors by authorities of Designated Non-Financial Business and Professions (DNFBPs).
Speaking at a news conference on Monday, Muhammad Ahsan Malik, Vice President, (Punjab) Federation of Realtors (FOR) and General Secretary of Real Estate Consultants Association (RECA), said the director-general of DNFBPs had planned to inspect the offices of developers, builders and jewellers soon after budget (2021-22), which would create harassment and panic in the market.
Mr Malik who is also convener of the FPCCI Committee on Real Estate Sector said the developers and property dealers had been issued 20,000 notices for compliance under the Anti-Money Laundering Act 2010. The questions for the developers and builders and jewellers are the same even though their businesses were totally different from each other and entailed substantial compliance costs.
He said it was difficult to suddenly show compliance with all kinds of laws, conditions and legal requirements including hiring of chartered accounts and specialised consultants. He said it was beyond imagination how a property dealer, for example, could check the sources of income of a client even before a sale-purchase deal is finalised when such information may not even be accessible from banks and National Data and Registration Authority (Nadra).
From June 11, the Directorate General of DNFBPs with the workforce of Directorate General of Intelligence and Investigation Inland Revenue would conduct raids at the offices of the developers, dealers and jewellers, he said. This would send a very negative message at the domestic and international level and halt investment in the real estate sector.
Mr Malik said it was very strange that the prime minister had announced an amnesty scheme for the construction sector along with an incentive package to trigger activities in 40 industries associated with construction but small businesses like property dealers are being made to comply with technical and investigative nature of information.
He suggested that separate laws and compliance criteria should be made for each category keeping in view their mode of business.
The legal requirements of DNFBP should be fulfilled by the transferring, registration authorities and societies ie CDA, LDA, KDA, Bahria Town, DHAs and revenue authorities etc and not by the individual real estate agents, he added.
He said presently DNFBPs who are ‘filer’ are being harassed by FBR, and are being served with notices whereas no effort for registration of ‘non-filer’ for registration as DNFBP was being made by the FBR.
Currently, real estate agents, builders, developers, money-changers and jwellers are treated under SRO924 despite the fact that these businesses have no uniformity in their way of working but they have to comply with each other’s KYC (know your client) requirements.
Published in Dawn, June 8th, 2021