KARACHI: Federal Board of Revenue (FBR) to offer many incents through amendment to income tax law in order to comply with the announcement of the prime minister to grant tax amnesty to construction sector.
According to highlights released by Arif Habib Limited, the following incentives to be offered by the FBR:
1. Special tax provisions for builders and developers
2. Exemption from provisions of section 111 of the Income Tax Ordinance 2001, on construction activity
3. Rationalization of the Capital Gains Tax (CGT)
4. Valuation of Real Estate / Plots
5. Rationalization / Reduction in Sales Tax on Construction Material
6. Exemption of taxes on first house
7. Establishment of special taxes.
The analysts said that the domestic construction sector has faced enormous challenges in recent times due to changes in the regulatory environment (influenced by the ruling government, FATF etc.) including provision of money trail, assessment of income and increase in valuation of real estate.
Moreover, regulations such as CNIC requirement, restriction on sale of construction material to non-registered clients of over PKR 10mn etc.) also hindered construction activity.
The government has recognized the importance of the housing and construction sector and has addressed some of these concerns under the “Special Incentive Package for the Construction Industry” to revive the real estate sector.
The Government intends to dilute the impact of Covid-19 outbreak on domestic employment and has therefore introduced this package to mitigate its impact to some extent.