CONSTRUCTION IS AN INDUSTRY IN PAKISTAN NOW.
PM of Pakistan Mr Imran Khan has announced yesterday that construction field will be regarded as a new industry in Pakistan. Which means the construction industry would have a mechanism of its own. Also a grass root level service would be available to all the construction related business’s in Pakistan. As the economic assistance package which was specially tailored for the construction industry in Pakistan. COVID -19 has created a havoc in the whole world, shutting down the biggest economies in the world.
The major relief to the industry by Prime Minister include:
- Those who will invest in the industry this year will not be questioned about their source of income.
- Fixed tax will be introduced in the construction sector and if the investor invests in construction projects under Naya Pakistan Housing Authority, 90% fixed tax will be removed and he will only pay 10% tax.
- Withholding tax on construction will be lifted from all sectors, except steel and cement.
- There will be no capital gain tax for a family that sells its house.
- The tax rate will be fixed for the construction sector, and constructors will be charged tax per square foot or square yard.
- A subsidy of Rs. 30 billion is being given to Naya Pakistan Housing project to spur the construction activities.
- Sales tax are being reduced in coordination with the provinces, Punjab and Khyber-Pakhtunkhwa have agreed to reduce it to two percent
- Construction Industry Development Board to be set up to support the sector.
- Rate of tax be reduced in accordance with / proportionate to the increase in the valuation table
- CGT holding period for constructed property be reduced from 4 years to 3 years (as was the case prior to 2019).
- CGT holding period for real estate / plots may remain 8 years
- However the rate of tax may be significantly reduced on sliding scale from fourth year on wards.
- While declaring their net wealth, builders and developers will be eligible to take credit / impute income equal to 10 times of tax paid under this schedule
It is to be noted the investment made by any person from 3 April 2020 now till 30 June 2022. Hence under the scheme on purchase of land and constructing any structure (house, commercial building etc) will be exempted. Which will effect from provisions of Section 111 of the Income Tax Ordinance 2001. Which also applies tax on the person concealed income.
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CONCLUSION FOR CONSTRUCTION INDUSTRY IN PAKISTAN
Hence after all the relief announced by the Government of Pakistan. There is a strong probability of the revival of the construction industry of Pakistan. Which has not seen significant growth as in the other parts of the world.
For example Singapore and Dubai are the lead examples of real estate and construction industry. Therefore the revenue been generated by a country depends a lot on its construction industry. Pakistan does lag behind but certainly the potential is still there.
This along with many other opportunists will bring a whole new concept of modern living with raised standards. One of the new arrival on the block is a new residential housing society in Islamabad called Blue World City.