The Federal Board of Revenue (FBR) has identified over 70 real estate agents allegedly involved in transferring millions of dollars to the UAE through informal money transfer methods like Hawala/Hundi, contributing to recent instability in Pakistan’s exchange rate, according to sources cited by The News.
These transfers, which were made in cash and converted into foreign currency on the open market, were then sent to Dubai’s booming real estate sector. Senior officials have flagged these transactions, signaling concerns about the size of the operation and suggesting it could be just the tip of a much larger financial scandal. The FBR has recommended that the Federal Investigation Agency (FIA) and other relevant authorities launch a full investigation into the scale of these illicit fund movements.
The report reveals that property dealers have been collecting large sums from clients, converting them into foreign currency, and sending the money to the UAE for real estate investments. In parallel, real estate moguls have warned the government that proposed tax hikes and a potential increase in the “no questions asked” investment limit from Rs 10 million to Rs 25-50 million under the Tax Laws Amendment Bill 2024 could drive investment abroad, particularly to markets like Dubai.
In response to the issue of undisclosed assets, the government has given the FBR two months to develop an app that will allow taxpayers to voluntarily amend their returns and adjust their asset declarations.
Representatives of the real estate sector have defended the practice, noting that investment in Dubai’s property market has been a long-standing trend. They argue that exchange companies have facilitated these transactions with little scrutiny on the sources of funds. Estimates suggest that around two million dirhams are regularly transferred for property purchases in Dubai.
To curb these illegal fund transfers, real estate investors have called on the government to reduce property taxes and introduce investment incentives that would discourage foreign property purchases through informal channels.
