Islamabad Chamber of Commerce and Industry (ICCI) President Muhammad Shakeel Munir said the government imposed new property tax through Budget 2022-23 on the real estate sector which will adversely affect the growth of this important industry and largely increase unemployment.
“The construction industry plays a vital role in the development of the economy, as better growth of this industry promotes businesses of over 50 allied industries,” Mr. Munir said, as per a statement released on Saturday.
He has demanded the government review the taxes imposed on the real estate sector and restore the old incentives.
He highlighted that the government in the new budget had suggested that the owners of more than one immovable property of above Rs 25 million value in Pakistan shall be considered to have received the rent equal to 5% of the fair market value of the immovable property and shall pay tax at the rate of 1% of the fair market value.
Moreover, Mr. Munir said that the government also imposed a 15% tax on the capital gains of immovable property in the case of a one-year holding period, “which is very high”.
Likewise, an increase from 1% to 2% has been observed in the advance tax on the sale/ purchase of property for the tax return filers
“All these tax measures will badly affect business activities in the entire real estate sector and create more unemployment,” Mr. Munir remarked.
He recommended that the government should increase taxes on the non-filers of tax returns, and should avoid imposing more taxes on the filers.
The ICCI president added that a 2% tax had also been imposed on all those individuals, including companies and the Association of Persons (AOPs), having an annual income of Rs300 million or more.
“This tax should be reconsidered to save the business community from the burden of unnecessary taxes.”
However, in the new budget, agriculture and agro-industries have been exempted from customs duty, while other industries have been ignored.