LCCI Pushes for Real Estate Tax Reforms

LCCI Pushes for Real Estate Tax Reforms

The Lahore Chamber of Commerce and Industry (LCCI) has called for a significant reduction in taxes on the real estate sector to stimulate growth in the construction industry and attract both local and foreign investments. Recognizing the sector’s vital role in driving economic activity, the LCCI organized a seminar titled “Real Estate Taxation” on Wednesday to address the challenges faced by the industry and propose practical solutions.

The seminar was attended by key stakeholders, including Chairman of the Prime Minister’s Task Force for Housing Hafiz Muhammad Nauman, LCCI President Mian Abuzar Shad, Vice President Shahid Nazir Chaudhry, and Convener of the Real Estate Standing Committee Muhammad Rafiq Hasrat. A large audience of stakeholders deliberated on the tax-related issues plaguing the sector and explored viable reforms to revitalize investment and growth.

Hafiz Muhammad Nauman highlighted initiatives by the federal and Punjab governments to support the construction and real estate sectors, acknowledging their critical contribution to economic growth and job creation. He emphasized that a thriving real estate sector is essential for a robust economy.

LCCI President Mian Abuzar Shad and Vice President Shahid Nazir Chaudhry expressed serious concerns over the heavy tax burdens that have hindered investment in the sector. They proposed lowering the tax rate to a uniform one percent and advocated for the reduction or abolition of Federal Excise Duty on property transactions to encourage affordability and attract investments. Such measures, they argued, would not only rejuvenate the real estate sector but also have a positive impact on the 50 allied industries connected to construction.

Muhammad Rafiq Hasrat, Convener of the LCCI Standing Committee on Real Estate, provided an in-depth analysis of the existing tax framework, including profit taxes, capital gains taxes, federal excise duties, and advance sales taxes. He pointed out that the additional taxes introduced under the Finance Act 2024, along with higher rates, have dampened investor confidence and slowed down real estate activities, leading to stagnation in the sector.

President Mian Abuzar Shad underscored the broader economic implications of a struggling real estate market, stressing its role as the backbone of the economy. He highlighted that meaningful progress requires immediate tax relief and the introduction of investor-friendly policies. He called upon the government to urgently address these taxation issues, emphasizing that the real estate sector has the potential to transform Pakistan’s economy by generating jobs and boosting allied industries.

The seminar concluded with a unified appeal to the government to prioritize the revival of the real estate sector by implementing tax reforms. Mian Abuzar Shad appreciated the government’s focus on the construction industry but reiterated that alleviating the tax burden is essential for unlocking the sector’s full potential and fostering sustainable economic growth.