PM announces tax incentive package for construction industry

PM announces tax incentive package for construction industry

ISLAMABAD: Prime Minister Imran Khan on Friday announced a comprehensive tax incentive package for construction industry and allowed opening of activities in this sector from April 14, 2020.

According to state-run media the prime minister announced the opening of construction sector from April 14 to help the country’s daily wagers and laborers, affected by continued lockdown due to COVID-19 outbreak, to earn their livelihoods.

Talking to media-persons, he said the government’s decision taken in coordination with the provinces, was also aimed at reviving economic activities in the country, badly hit by the situation arising out of the coronavirus outbreak.

The prime minister also announced various incentives for the construction sector including tax incentives, waivers and subsidies in the areas of sales tax, capital gain tax, withholding tax etc.

Giving details of the decisions, he said that those investing in the construction sector during the year 2020, would not be asked any queries about the source of their income.

Secondly, the Prime Minister said, the government had also decided to bring the construction sector in the fixed-tax regime under which the rate of tax on land would be levied on the basis of per square yard and per foot.

He, however, added that those investing in the prime minister’s housing programme would be given 90 percent tax rebate and they would be required to pay just 10 percent of the total calculated tax amount on their projects.

Imran Khan said that it has also been decided to waive-off withholding in cement and steel sectors.

Besides, he said, that in coordination with the provincial governments of Punjab, Khyber Pakhtoonkhwa and Sindh, it has also been decided to bring the sales tax in construction sector to 2 percent through consolidation of all taxes.

The Prime Minister further said that Capital Gain Tax on the sale of house was also being done away with.

He also announced Rs. 30 billion subsidy for Naya Pakistan Housing Programme, adding, further subsidy would be given on its progress.

The Prime Minister said the government has also decided to give construction sector the status of industry.

It has also been decided to establish the Construction Industry Development Board (CIDB) to help promote the construction industry in the country, he added.

The Prime Minister said all the decisions regarding the COVID-19 were being taken in coordination with the provinces. However, he added, any of the provinces could make changes as per their requirements.

He said since the Rs. 1200 billion’s stimulus package announced by the federal government to provide financial relief to the poor and daily-wagers in the wake of lockdown due to Coronavirus outbreak, the government had decided to open the construction sector.

The prime minister said with the agriculture sector, which was already open, providing jobs to people in villages, the opening of construction sector, the main source of employment in urban areas, was very much needed.