Islamabad, September 28, 2023 – The Islamabad Chamber of Commerce and Industry (ICCI) has issued a call to authorities for the withdrawal of Section 7E from the Income Tax Ordinance, 2001, with the aim of revitalizing investment in the real estate and construction sector.
ICCI President Ahsan Zafar Bakhtawari made this demand on Thursday, emphasizing that the introduction of Section 7E via the Finance Act of 2022 has become a significant disincentive for potential investment in the real estate sector, which in turn is negatively impacting the overall economy.
Speaking during a meeting with a delegation of real estate developers and builders, Bakhtawari revealed that following a Lahore High Court judgment, the collection of deemed income tax under Section 7E has been halted in Punjab. He urged the government to extend this withdrawal nationwide to eliminate discrepancies.
He informed the delegation that the ICCI is actively working toward the withdrawal of this tax in the upcoming budget, as it believes that doing so will facilitate the growth of business and investment activities in the real estate and construction industry.
Bakhtawari further highlighted that focusing on the real estate and construction sector could transition the country’s economy from recession to sustainable development.
Sardar Tahir Mehmood, President of the Federation of Realtors Pakistan, stressed that overseas Pakistanis have a keen interest in investing in the real estate sector in Pakistan. However, the recent tax increases are discouraging them. He called for serious consideration of this issue and the provision of attractive incentives to boost foreign investment and support the fragile economy.
Former ICCI President and CEO of Centaurus, Sardar Yasir Ilyas Khan, noted that a reduction in heavy taxes on the real estate sector could attract billions of dollars in foreign investment to Pakistan, potentially revitalizing the economy.
Khalid Iqbal Malik, ICCI Group Leader, emphasized that the real estate sector plays a pivotal role in attracting remittances and foreign investment. However, the imposition of unnecessary taxes has led to a significant decline in both. He urged the government to rationalize taxes on this sector, withdraw the tax on deemed income, and create a conducive environment for its growth, which, in turn, would stimulate economic development in the country.