Pakistan’s Construction Industry Gets One Year Extension in Fixed Tax Scheme
Fulfilling a major demand of the construction industry, Prime Minister Imran Khan on Thursday granted one-year extension in date for the Fixed Tax regime, to boost economic activity and create employment.
The Prime Minister made the announcement and said the date has been extended till Dec 31, 2021. He described it a new year gift for the construction sector which was the key to offset negative impact of Covid19 pandemic on the national economy.
Prime Minister Imran Khan also extended the date for disclosures of source of income by the investors till June 30, 2021 and the one for buyers till March 31, 2023.
Khan, who made the announcement after chairing a meeting on the progress in the construction sector, Khan said the date for completion of projects has also been extended by one year.
The prime minister had announced PTI government’s construction package, allowing people to invest in the construction sector without disclosing the source of income, in April this year.
According to the Federal Board of Revenue the fixed tax scheme is applicable to builders and developers, who opt for the scheme by registering their projects with the FBR. Builders and developers eligible for this fixed tax scheme include individuals, a company or an Association of Persons.
Prime Minister Imran Khan said so far 186 projects have been registered with the FBR, under the Construction package, while projects worth another Rs 116 billon were in the pipeline. He said work on 163 projects has been launched in Punjab, while projects worth Rs 136 billion were in approval phase.
He said it was expected that the measures would generate an economic activity worth Rs 1500 billion and create 250,000 jobs in Punjab alone.
Khan said similar projects were in different phases in Khyber Pakhtunkhwa, Karachi and Baluchistan.
He mentioned the approval of the foreclosure law and said now the banks were extending loans for construction of houses for the low-income groups. He said, under the scheme the banks would extend loans worth Rs 378 billion by Dec 2021.
He said the government would provide of Rs 30 bln as subsidy on the loan for markup for the low cost houses, with a maximum of 5 percent on five marla houses and 7 per cent on ten marla houses.
He said the government would provide a grant of Rs 300,000 each for the construction of first 100,000 houses. He said the major civic development authorities like CDA, LDA etc had initiated automated approvals and said the masterplans of all major cities were being revised.
He said the government would also be taking into account the issue of food security due to the haphazard growth of the cities, which otherwise would reduce the cultivable land.
Khan said the government was also digitizing records of lands initially in Karachi, Islamabad and Lahore, while it was also in the process of digitizing all government lands as it was dead capital, and needs to be taken into account.
He said the PTI government was the first, after 1960s, to work on promotion of industry for revenue generation, retirement of debt and creation of jobs.