Islamabad:
Prime Minister Shehbaz Sharif has deferred a decision on a tax incentive package to revive the real estate sector, since the problems of giving subsidies to boost construction activities and an amnesty to reveal the source of income remain undecided.
Once again, the tax authorities opposed a businessman’s proposal to grant an equivalent amnesty of RS50 million to housing, store or office buyers for the first time due to a constant prohibition of the International Monetary Fund to give amnesty.
The housing sector task force met with Prime Minister Shehbaz Sharif on Friday and shared with him the recommendations to reduce tax transactions taxes and abolish the Federal Special Tax; Government sources told The Express PAkGazette. Even a file pays about 8% of the tax value in taxes on the purchase of properties.
There was a consensus to reduce taxes in general, but the key problems remained undecided, the sources added.
FBR president supported the proposal to abolish the Federal Special Tax Service of 3% and said that the “unjustified” tax has already been disputed by taxpayers and that the matter is also agitated in court. The FBR requires a 3% tax in households that were built in the past and have been sold more than once, which is beyond the scope of the law.
The prime minister has commissioned the Minister of Economic Affairs Ahad Khan Chema to adjust the package, in addition to taking the IMF on board, the sources said.
The meeting discussed taxes on the sale and purchase of property, abolish the Federal Special Tax, either to grant a subsidy to the interest rate to receive loans for housing construction and if the buyer for the first time receives the Amnesty of RS50 million RS50 million inexplicable revenues, according to people deprived of discussions.
Some members of the working group expressed concern that the incentive package can result in parking money in the real estate sector and can again feed speculative activities.
Arif Habib, one of the main main entrepreneurs, suggested that the housing buyer for the first time should not be asked the source of income of up to RS50 million. However, the president of FBR, rashid langial, opposed the proposal and said he would be equivalent to giving fiscal amnesty, that the IMF would not allow.
Due to the large size of the cash -based economy, the corporate sector and banks are reluctant to undertake important construction projects, said Arif Habib. He said that his proposal did not fall strictly on the definition of amnesty, since it would be limited only to genuine buyers for the first time.
The large size of the informal economy is resulting in declaring property values at a lower price than the real price or people use effective to avoid scrutiny.
The prime minister instructed that government officials should sit with Arif Habib and aim to find a solution. It arose from the meeting that the business community would meet with the IMF next month to take the agenda of the RS50 million amnesty scheme for a discussion.
“It seems that there is a consensus on the relief of Givig for the real estate sector,” said FBB president, Langial Rashid, last week at a meeting of the National Finance Committee of the Assembly that had deferred the legal amendment that requires a dissemination Initial of the source of purchase property.
The prime minister had constituted the task force of the housing sector after the activities of the real estate sector were slowed due to strong taxes and general economic growth. Pakistan’s economy grew at a rate of 0.9% in the first quarter of this fiscal year.
The prime minister expressed the desire that the real estate sector package should aim to promote the construction and economic activities in the country.
The meeting discussed interest rates subsidies to allow lower and medium income groups to take bank loans for housing construction. The Minister of Economic Affairs has been asked to present the recommendations for next week.
Former Prime Minister Imran Khan had also given the reduction of interest rates for the lower average income group, which helped many to have their own refuge. The Central Bank has established the policy rate at 12%, but home loans remain very expensive that are more expensive for more than 17%.
The prime minister has not yet made a movement to reduce the fiscal problems of the salaried class, which paid RS285 billion in income tax during the period from July to January of this fiscal year. RS285 billion payments are RS100 billion more than last year. This is also much more than the annual objective of the government of the collection of additional taxes of the wage class.
The National Committee of Finance of the Assembly Assembly this week delayed the approval of an amendment bill, which proposed a prohibition of the purchase of properties without the initial dissemination of the money source to buy the asset. The delay in the approval of the bill of the amendment of fiscal laws provided great relief to the real estate sector that could now make property transactions without the initial dissemination requirement of the source of purchase.
The Government official said that no help package for the real estate sector has been completed and that consultations with the provinces and the IMF have not begun either.
The real estate sector remains largely not regulated. Vast fertile agricultural lands become housing societies; Many of them have no regulatory approvals and are doing illegal business. There is also more availability of plots in the market than real demand due to very high prices.
There is also an overall problem of apartments and plots and the solution to this is to allow the investment of construction projects through custody accounts.
