ABAD Fears Tax Measures to Divert Real Estate Investment

ABAD Fears Tax Measures to Divert Real Estate Investment

Karachi, June 27, 2024 – The Association of Builders and Developers (ABAD) has voiced concerns that the tax measures introduced in the 2024-25 budget will redirect the flow of dollars away from Pakistan.

ABAD Chairman, Asif Sumsum, expressed these concerns in a statement on Thursday, highlighting the potential adverse effects on the construction industry and the broader economy.

Sumsum emphasized that the increased tax burden on the construction industry, as outlined in the new budget, could lead to significant negative consequences. He warned that remittances, which are a critical source of foreign exchange for Pakistan, might be diverted to other countries if the local construction sector becomes less attractive for investment. This shift could have a domino effect, leading to the destruction of the local industry, unemployment for millions, and the loss of homes for numerous poor families.

“The primary responsibility of the government is to protect local industries and provide employment to its citizens,” ABAD Chief stated. He urged the government to shield local industries from the adverse impacts of the new tax measures to prevent a spike in unemployment. ABAD Chairman pointed out that a substantial portion of the foreign exchange sent by Pakistanis living abroad is currently invested in the construction industry. If this sector faces additional tax burdens, the inflow of foreign exchange to Pakistan could diminish significantly, with funds being channeled to more favorable investment climates abroad.

Sumsum also stressed the vital role the construction industry plays in the economy. “The construction industry is a crucial component of our economy, providing employment and contributing to economic stability,” ABAD Chief said. He added that the imposition of additional taxes would not only deter investment but also threaten the survival of numerous businesses linked to the sector.

“A stable and thriving construction industry is essential for ensuring investment and economic growth,” Sumsum asserted. He cautioned that undermining the industry would hinder the country’s development and exacerbate its dependency on institutions like the IMF.

In light of these concerns, Sumsum called for the immediate withdrawal of the additional taxes imposed on the construction sector. He also urged action against the advisors responsible for implementing these tax measures, arguing that such policies are detrimental to Pakistan’s economic well-being.

“The construction industry is the backbone of Pakistan’s economy. Harming this sector is tantamount to conspiring against the country,” he concluded. ABAD’s plea reflects the broader apprehension within the industry about the future stability and growth of the construction sector under the new fiscal policies.