Pakistan Real Estate Investment Forum (PREIF) has submitted its proposals for the upcoming budget 2017-2018 to National Assembly’s Standing Committee on Finance saying that tax reduction on real estate sector will help boost the sector, enabling the government to earn more.
Shaban Elahi, President PREIF, in a statement issued here on Thursday, said by implementing the proposals submitted by PREIF will not only pave the way for enhancement of local and foreign investment but will also play an important role in boosting government’s revenue manifold.
Demanding a friendly federal budget for the real estate sector, Elahi also urged the provincial governments to reduce provincial taxes such as stamp duty, Capital Value Tax (CVT), Town Tax and Registrar fee in order to minimise the transactions costs. “It will not only benefit consumers but a large number of people will opt for documented transactions instead of resorting to General Power of Attorney which prompts disputes,” he added.
He informed that at present, the rate of provincial taxes on stamp duty is 2 per cent, CVT is 2.5-3 per cent, town tax 1 per cent and tax on Registrar Fee is also 1 per cent. “Total rate of taxes in the province is around 7 per cent which needs to be brought down,” he noted.
PREIF president also drew the attention of the federal government towards the anomalies detected during the property valuation in some areas of the country including SITE industrial area Karachi, Landhi Industrial area, Port Qasim Authority, DHA City Karachi, Anmol Cooperative Society Lahore, some areas of Faisalabad, and DHA valley Islamabad.
“Stakeholders were assured that the anomalies would be rectified but so far no practical step has been taken in this regard,” Elahi added, further demanding the federal government and the FBR to remove these anomalies forthwith.
According to government’s official figures, Rs 76 billion worth of assets in the real estate sector were documented in just five months. For the first time, such a huge amount has been documented and became a part of the country’s mainstream economy due to the new section 236W of the Income Tax Ordinance, he said.
Shaban Elahi also demanded a reduction in property tax from the current 2 per cent to 1 per cent for filers. Similarly, for a filer/seller, the rate of such taxes should be reduced to 0.5 per cent from 1 per cent. However, for the non-filers, the existing tax rates may be upheld.
PREIF president also appealed to the government for further facilitation to the real estate sector by enabling business friendly environment so that the local and foreign investment could be increased.
The proposal submitted by the PREIF was highly appreciated by the members of the NA Standing Committee on Finance, including its Chairman Qaiser Ahmed Shaikh as well as Mian Abdul Mannan.