Association of Builders and Developers of Pakistan (ABAD) has urged the federal and provincial government to slash transfer taxes at lowest level and jointly introduce single valuation table in the upcoming budget 2017-18. In its budget proposals, the ABAD said that this proposal would encourage better documentation and lead to corporatisation of real estate developers and builders besides encouraging financial institutions to invest in real estate development.
Following manifold increase in the property valuations, it suggested to reduce withholding tax on property transfer from 3 per cent to 2 per cent. ABAD is of the view that as this tax is not adjustable, actual receipts will not suffer due to higher valuations and will reduce burden on the taxpayers. It recommended that taxation under the provision of 236W should be made optional for those who under normal circumstances were able to reconcile the new values in their wealth statement without taking advantage of the provision of 236W.
Moreover, ABAD strongly advocated granting exemption to Pakistani expatriate and locals, who were buying first unit in Pakistan from disclosing source of funding for at least three years in the same way as it was available for investment in share market. It also proposed to enhance the existing four million rupees to five million rupees for withholding taxes exemption on low cost properties and added that regulatory duty on steel imports should also be reduced at rationale level in order to safeguard real estate sector.
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