The Khyber Pakhtunkhwa government approves 8 billion rupees tax concessions for the construction sector on property transfer.
Under the tax relief package, 2 percent on the local council tax on the transfer of immobile property and 0.5 percent registration fee on deeds had been waived.
Moreover, the construction sector of the province has also got an omission from sales tax on services and a discounted rate of two percent for all other activities.
This relief package contains no capital value tax that is part of the Finance Act 2020-2021. According to the documents, the government had to ease the business activities and so the development of the construction sector is its top priority to accelerate economic growth through employment generation and industrial development.
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“The government intends to harmonize the [construction] sector in a holistic manner by improvising ease of doing business and providing monetary relief through either revising tax or improving tax processes,” the document read.
The document further adds that the provincial government’s role in order to boost the construction sector could be described from two major ways, i.e. changes to property transfer-related transactions and taxes charged from construction-related services.
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Furthermore, documents state that multiple approaches to transferring property documentation are there. From which, 0.5 percent registration fee and two percent local council tax on the registered endeavor in both urban and rural areas, stamp duty 2 percent, and mutation fee, rural areas with two percent.
The document also said, however, local government department raised their voice in the issue of weak financial position of tehsil municipal administration for requesting to waive the local council fee completely. It was then agreed for two percent stamp duty profit. Under the Khyber Pakhtunkhwa construction tax relief package, only one percent would be transferred on a monthly basis outflow of Tehsil Municipal Administrations for the salary to the local government department.