Govt extends Fixed Tax Regime for Construction Sector, announces PM

Prime Minister Imran Khan informed that construction projects worth Rs 186 billion have been registered on the FBR portal, under the incentive package announced for the construction sector in April.

“Whereas Rs 116bn worth of construction project is in the draft stage, and Rs 136bn construction projects are in approval stages. We believe that economic activity of Rs 1,500 bn will be generated in the province of Punjab due to these projects resulting in the creation of 250,000 jobs,” said PM Khan, in his address on the construction sector in Pakistan.

Similarly, construction projects have been started in other provinces including, Khyber Pakhtunkhwa, Karachi, and Balochistan, he said.

Talking about the incentives provided to the construction sector, including low-cost housing for the salaried class, PM Khan said that the first success we achieved was the approval of the Foreclosure Law. “Due to the approval of the said law, for the first time in Pakistan, the banks are financing in the low-cost housing,” he informed.

PM said that the banks have guaranteed us to provide Rs 378bn for the construction sector till December 2021.

“We have subsidized markup rates for the construction sector, for a 5-Marla house, we have cap the markup rate to five percent, i.e. the bank could not charge over 5pc. Whereas, for a 10-Marla house, the markup rate has been set at 7pc for five years period.”

Our government decided to give Rs 30bn in subsidies to low-cost housing. “For the first 100,000 low-cost houses that will be constructed, a grant of Rs 300,000 per house will be provided in order to reduce the house cost.”

One of the biggest achievements this year was the Automated Approval Regimes said Khan, lauding the performance of CDA and LDA. “The time taken for approvals has been considerably reduced due to this automation,” he said.

For the first time, it has been decided that new master plans will be made for big cities, as it is the need of time said the PM.

PM highlighted the importance of the digitization of the land records, informing that the digitization of land records in Karachi, Lahore, and Islamabad will be completed by August next year. “The digitization of government lands is especially important as it is stuck as a dead capital whereas the government institutions are debt-ridden,” he said.

Announcing incentives for the construction sector, PM Khan informed that the government has extended the Fixed Tax Regime till 31 December 2021. “This was a major demand of the construction industry,” said PM.

Secondly, the Section-111 Disclosing Source of Income of Investment has been extended till 30 June 2021. Whereas the completion date of the projects, which were to be completed 30 September 2023 has been extended by one year. Fourthly, the disclosure of the source of income for buyers has been extended to 31 March 2021.

PM Khan expressed delight over the record cement sales in 2020, saying that this shows that construction activity began in Pakistan. He said that due to the opening of the construction sector earlier than other countries, Pakistan was able to coup with the COVID-19 pandemic.

He said that we have decided to boost our industries as it will lead to wealth creation, employment generation, and debt reduction.