Tax amnesty for the construction sector: Rs50 to 250 per tax foot for 3 categories
ISLAMABAD: To provide tax benefits and protect the construction industry, the federal government has prepared a draft of the Ordinance Tax Tax Amendment 2020. Because, the Senate and National Assembly are not in session so the President of Pakistan will soon issue this regulation soon. Under these regulations all of Pakistan’s territory has been distributed in three categories. In Category-I, three major cities of Karachi, Lahore and Islamabad have been included. Whereas Category-II consisted of the cities of Hyderabad, Sukkur, Multan, Faisalabad, Rawalpindi, Gujranwala, Sahiwal, Peshawar, Mardan, Abbottabad and Quetta. The remaining small and large cities in the country are included in Category-III. Maximum fixed tax sheets have been made for Category I cities. Fixed tax rates for Category-I commercial buildings, residential apartments and industrial buildings and plots have been completed. The maximum fixed tax rate is Rs250 per square foot and the minimum tax rate is Rs50 per square foot for Category-III.
This regulation will be officially announced in all countries immediately.
Under this draft regulation, builders and developers will be entitled to benefit from the new law from the first day of enactment of this regulation and they are bound to start their construction projects starting on 31 December 2020. They are also expected to complete their construction projects on 30 September 2022. Builders and developers are bound to obtain registration from the Securities and Exchange Commission of Pakistan (SECP). After registration, the names of shareholders and builders will not change without SECP’s board approval. Through the proposed draft regulation, the 1989 Financial Act and the 2001 Income Tax Act will be further amended. Under the regulation, a new Pakistan Housing and Development Agency will be formed.
The draft regulation facilitates investors, builders and developers not to show the source of their capital used in their projects.
President of the Islamabad Builders and Developers Association Chaudhary Naseer Ahmad said that with the adoption of the proposed regulations, billions of rupees would be invested in the construction industry. In addition, dozens of closed factories will start production which includes steel, cement, ceramics, electricity, and other factories that produce construction materials. With this, tens of thousands of unemployed Pakistanis will get decent jobs.
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