Cabinet approves ordinance giving legal effect to incentive package for construction industry
KARACHI: The cabinet approved an ordinance aimed at providing incentives for the construction sector, media announced on Friday. Premier Imran Khan earlier announced the package to increase job prospects in the country following the coronavirus pandemic.
Withholding tax as part of the ordinance was exempted from building material and service provision, except for cement and steel. In addition, a fixed tax system was implemented for constructors and developers.
In order to construct low-cost houses under the Naya Pakistan Housing Authority, tax was reduced by 90 per cent.
Similarly, the house measuring 500 square yards and a flat of 4000 square yards has been given one time exemption on capital gain tax. The construction industry would be entitled to use the same kind of facilities for importation of plants and machinery available to other industries.
Furthermore, the reward package will refer to the initiatives to be launched before December 30th, 2020, and to all the unfinished schemes that are still in progress. Builders and developers will be required to register their projects with the Federal Board of Revenue through the IRIS web portal, according to the ordinance.
The government also reduced the advance tax on the auction of property from ten per cent to five per cent, while the sales tax on construction services in Islamabad was brought to zero on the Punjab model. On the model of the Punjab and Khyber-Pakhtunkhwa provinces, exemption was also provided on capital-value tax in the federal capital territory.