FATF Stopping Dubious Transactions in Real Sector
The real estate sector faces a stiff wind as many transactions are still being done through an underhanded method.
The Designated Non-Financial Business and Professions (DNFBPs) helps the real sector report the transaction through a systematic means. However, many planned transactions happen in the grey areas making it difficult to track the transaction or consider them as part of the economy, resultantly these grey area transactions do not help the government.
It has been reported that many housing societies and property markets still carry on with their open certificate transactions or affidavits that carry a value of around Rs 1m to Rs 10m.
The property dealers and clients deal openly through cash transactions and share open files. The well-known housing societies have also adopted this model.
The internally built system of dealing property has existed long before any regulations. The transfer of properties has kept going in their old-fashioned manner, where a transaction takes place of the property but the owner of the property does not pay any amount towards the government for such transactions. Many fixed assets, plots, and properties happen to change owners through cash-based transactions.
The developers on the other hand complete this transaction and charge fees such as utility charges, transfer charges, sports charges, security charges, and so on. All these transactions occur without going through the legal or revenue system of the government.
According to the dawn news,
FBR simplified the reporting requirements for real estate sector players, including brokers, developers, and builders recently registered as DNFBPs on the intervention of the National Coordination Committee on FATF to meet international compliance standards.
This means that brokers, developers, and builders are getting aligned with the FBR and being responsible for reporting requirements set by the FATF through FBR. The incentives are enough to put the real sector on the right track.
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