Builders, developers told to wait till next budget for concessions: report

ISLAMABAD: The Pakistan Tehreek-e-Insaf led government on Monday rejected a number of demands made by the Association of Builders and Developers of Pakistan (ABAD) related to tax rates, reported The News. 

In a meeting with Adviser to Prime Minister on Finance Dr Abdul Hafeez Sheikh on Monday, the ABAD was informed that a decision on concessions in taxes would only be made in the next budget. 

According to The News, the rates of Sales Tax and Federal Excise Duty on construction material, especially cement, would remain unchanged till the next budget.

In the meeting held yesterday, various proposals were presented to enhance and boost the property business in the country and improve tax collection for the government. 

The proposals were regarding taxation rates on property, building height restrictions in Karachi and rationalisation of property valuation tables.

Sheikh promised the builders association that all possible help will be provided to the sector keeping in view the principles of equity, transparency and fair play by the government. 

"I realise the importance of the business and wants to engage more with the sector for better facilitation and understanding," Shiekh reportedly said, directing a further refinement of proposals before the next meeting.

FBR rejects fixed tax scheme

Sources told The News on Monday that the Federal Board of Revenue (FBR) has rejected rejected a fixed tax scheme for developers and builders and deferred the Builders and Developers Special Procedure Rules 2019. 

Under the facilitation measures for the developers and builders, separate zones/circles have been constituted at the level of field formations and developers and builders assured of cooperation. 

The first issue raised by the ABAD was the fixed income tax regime. Under proposed scheme, the income computed and tax payable thereon shall be on ‘project-by-project' basis under the head of ‘Income from Business.' Tax payable thereon on annual basis (till the year of project completion) shall be computed at the rates mentioned. The said rates would be applicable to compute tax liability for the project for the tax years when the respective project is under construction. The annual tax liability on that basis shall be worked out as specified in the said rules.

The developer and builders also requested the tax collector for rationalisation of valuation table of immovable properties. The mistakes in valuation table may be rectified at the provincial level by forming a committee consisting ABAD representative, representative of real estate agent and FBR nominee. After five years, 25 per cent discount on valuation of built-up property has been proposed and after 10 years 50 per cent discount on valuation of built-up property. The timing be calculated after sub-lease or sale deed.

To dispose of pending cases and litigation, the ABAD has requested the FBR that the Chief Justice of Pakistan may be requested to form special benches at Supreme Court and High court level to dispose of pending cases of land and construction within 60 days.

Originally published in The News