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Builders pay six times lower tax under PM’s Construction Package

Reporting | - Posted: Oct 12, 2020 | Last Updated: 2 weeks ago
SAMAA |
Posted: Oct 12, 2020 | Last Updated: 2 weeks ago
FBR persuades more to register by Dec 31, 2020

Builders and developers can save around six times on taxes if they register under the Prime Minister’s construction package as it has a fixed regime.
“This saving on tax will add up to whatever profit you make,” explained the FBR’s Abdul Hafeez while addressing them at a seminar on the ‘PM’s Package on Naya Pakistan Housing Scheme’ at the Association of Builders and Developers House October 7. Abdul Hafeez is the Commissioner for Inland Revenue Audit at the FBR. FBR MTO Chief Commissioner Abdul Hameed Memon and ABAD members attended.

People can also whiten their “legally earned” money under the

package as they will not be asked for a money trail. But money earned illegally

or received through bribes cannot be laundered through this process. 

People earn and save money through legal means but may not pay tax on it. This

temporary scheme is so that their wealth can come into circulation, he

explained. The scheme is not for government employees.

Builders and developers can register with the FBR by December 31, 2020 for both

existing and new projects. FBR officials have been trying to reach out to builders

and developers across the country to explain the benefits. During the seminar skeptical

builders asked Hafeez to share the number of projects the FBR has registered so

far but he declined to share this information, saying they can’t for amnesty

schemes. He did say that the response so far has been encouraging.

Analysts have been attributing high cement

sales
to the construction package. Over 60 allied industries get a

boost when construction does well, which is why this strategy is often said to

be good for economies.

The FBR has defined new projects as those for which work began during

the period starting from April 17, 2020 and ends December 31, 2020 or is

completed on or before September 30, 2022. Existing projects are defined as those

that started before April 17, 2020 but are incomplete. They should also be

completed by September 30, 2022.

Low-cost housing projects developed by Naya Pakistan Housing and

Development Authority will be charged almost 90% lower taxes.

ABAD chairman Fayyaz Ilyas asked the government to extend the date

of the scheme by a year.

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