Islamabad:

Prime Minister Shehbaz Sharif has postponed a decision on a tax incentive package to revive the real estate sector as the questions of granting grants to increase construction activities and an amnesty to reveal income source remain undeclared.

Once again, the tax authorities opposed the proposal of a businessman to give RS50 million equivalent amnesty to first -time home, shop or office buyers due to a constant ban from the International Monetary Fund to provide amnesty.

The Task Force for the housing sector met with Prime Minister Shehbaz Sharif on Friday and shared with him the recommendations to reduce real estate transaction taxes and abolish the federal excise duty; The government sources told The Express Pakinomist. Even a files pay approx. 8% of the value of the property in taxes on the purchase of property.

There was agreement to lower the tax largely, but the most important questions remained indefinite, the sources added.

The FBR chairman supported the proposal to abolish the federal excise duty of 3% and said that the “unjustified” tax has already been disputed by the taxpayer and the case is also agitated in courts. FBR requires 3% duty of houses built in the past and has been sold more than once, which is out of reach of the law.

The Prime Minister is tasked with Minister of Economic Affairs Ahad Khan Cheema to fine -tune the package in addition to boarding the IMF, the sources said.

The meeting discussed the lowering of taxes on the sale and purchase of property, the abolition of federal point The people are interested in the discussions.

Some members of the Task Force expressed concern that the incentive package may result in parking money in the real estate sector and can again burn the speculative activities.

Arif Habib, Pakistans of the leading business people, suggested that the first time the home buyer should not be asked about the source of income of up to RS50 million. However, FBR chairman Rashid Langrial opposed the proposal and said it would mean giving tax amnesties that the IMF would not allow.

Due to the large size of the informal cash -based economy, the business sector and banks are reluctant to carry out large construction projects, explained ARIF Habib. He said his proposal did not strictly fell into the definition of the amnesty as it would only be limited to the real buyers of the first time.

The large size of the informal economy results in either declaring the values ​​of the property at lower than the actual price, or people using cash to avoid control.

The prime minister instructed the government officials to sit with Arif Habib and aim to find a solution. It emerged from the meeting that business would meet with the IMF next month to take the RS50 million Amnesty Scheme agenda for a discussion.

“It seems that there is a consensus on givable to the real estate sector,” said FBR chairman Rashid Langrial last week at a meeting of the National Assembly’s Standing Committee for Financing, which had postponed the legal amendment that required pre -information of the source to the purchase source property.

The Task Force for the housing sector had been composed by the prime minister after the activities in the real estate sector had declined due to heavy taxes and the overall profounding economic growth. Pakistan’s economy grew only by 0.9% rate in the first quarter of this financial year.

The Prime Minister expressed the desire that the parcel for the real estate sector should aim to promote construction and financial activities in the country.

The meeting discussed giving interest rates subsidies to allow the lower and middle -income groups to take out bank loans for housing construction. The Minister of Financial Affairs has been asked to make the recommendations next week.

Former Prime Minister Imran Khan had also granted a subsidy for reducing interest rates for the lower middle -income group, which helped many to have their own shelter. The central bank has set the policy rate to 12%, but the mortgage loans are still very expensive in the area above 17%.

The Prime Minister has not yet made a step to reduce the tax evils in the salary class that paid RS285 billion in income tax during the July-January period of this financial year. RS285 billion payments are RS100 billion more than last year. This is also much more than the government’s annual target for further tax collection from the grade.

The National Assembly’s Standing Committee for Funding this week delayed the approval of an amendment proposing a ban on the purchase of properties without pre -information of the source of the money to buy the asset. The delay in the approval of the amendment to tax law provided a great relief to the property sector, which could now carry out real estate transactions without the requirement of pre -information of the purchase source.

The government official said there has been no relief package for the real estate sector, and the consultations with the provinces, and the IMF has not started yet.

The property sector remains largely unregulated. Large fertile agricultural land is transformed into housing communities; Many of them do not have regulatory approvals and run illegal business. There is also more availability of the plot on the market than the actual demand due to very high prices.

There is also a question about oversailing apartments, and the plots and solution to this is to allow construction projects investment through Escrow accounts.