ICCI calls for reviewing taxes on real estate sector

This tax should be reconsidered to save the business community from the burden of unnecessary taxes

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Islamabad ( VOM ): Muhammad Shakeel Munir, President, Islamabad Chamber of Commerce and Industry, said that the construction industry plays a vital role in the development of the economy as the better growth of this industry promotes the business of over fifty allied industries. However, the government has imposed new taxes through Budget 2022-23 on the real estate sector which will badly affect the growth of this important industry and cause more increase in unemployment. He demanded that the government should review the taxes imposed on the real estate sector in the budget and restore the old incentives for the sector.

Muhammad Shakeel Munir said that the government has proposed in the new budget that those people who have more than one immovable property priced above Rs.25 million in Pakistan shall be deemed to have received a rent equal to 5 percent of the fair market value of the immovable property and shall pay tax at the rate of 1 percent of the fair market value of the said property. He said that the government has also imposed 15 per cent tax on capital gains of immovable property in case of one year holding period which is very high. He further said that the advance tax on the sale and purchase of property for filers has also been increased from one per cent to two per cent. However, he said that all these tax measures on the real estate sector would badly affect the business activities of this sector and cause more unemployment. Therefore, he demanded that the government review the new taxes imposed on the real estate sector to save the construction industry from further problems. He said that the government should increase taxes for non-filers but avoid imposing more taxes on the filers.

The ICCI President said that under the new budget, a tax of 2% has been imposed on all those individuals including companies and AOPs with an annual income of Rs.300 million or more. He said this tax should be reconsidered to save the business community from the burden of unnecessary taxes. He said that in the new budget, agriculture and agro-industries have been exempted from customs duty but other industries have been ignored. He emphasized that the government should provide tax exemptions on imports of machinery and technology to the industries of other sectors so that the industrial sector could upgrade itself and produce value added products which would further promote industrialization and boost our exports.

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