LAHORE: Continuation of the construction industry package by Prime Minister Imran Khan has encouraged more builders and developers to get register with Federal Board of Revenue (FBR), said sources.
According to the Board sources, the fixed tax regime for builders and developers has attracted more and more builders and developers to streamline their businesses with tax system. It may be noted that the package has been extended to December 2021 that has led to a buying and selling spree in the real estate sector across the country.
The Board sources are of the view that they are receiving fresh registrations at a faster pace and a good number of construction companies have got registered with the system during the third quarter of fiscal year.
They said the Board has offered the builders and developers to pay tax liability computed on the basis of square feet/yard in quarterly installments. New projects as well as existing incomplete project can opt for the scheme up to 31.12.2021, however in order to avail immunity from provisions of Section 111 of the Income Tax Ordinance, 2001, the project must be registered by 30.06.2021.
They said the only condition to avail the package by builders and developers is that they would have to register their projects with FBR online through IRIS portal and existing incomplete projects have to self declare the percentage of completion of project on the relevant date.
The Board sources said all the projects falling under the package are required to be completed by 30.09.2023.
It may be noted that the Board has exempted purchase of building material from requirement of withholding tax except cement and steel. Another exemption from requirement of withholding tax relates to acquisition of services relating to construction except those from companies.
The Board has also permitted to incorporate ten times of fixed tax paid as income in the books of accounts. There is 90% reduction in fixed tax liability for low cost housing and dividend paid by builder or developer companies shall not be liable to tax and there shall be no withholding on the payment of these dividends.
Copyright Business Recorder, 2021