Builders and buyers don't have to reveal sources of income
President Arif Alvi has issued an amending ordinance for the construction sector to extend the amnesty scheme for another six months. The FBR will not be inquiring about sources of income from builders and investors till June 30.
The president issued the Income Tax Amendment Ordinance, 2021 for the construction sector. The prime minister had announced a six-month extension of the scheme on December 31.
Meanwhile, the deadline to avail the fixed tax scheme on income from property has been extended till December 31.A one-year extension has also been given for the completion of construction projects.
Projects under the scheme can now be completed by September 30, 2023 instead of the original deadline of September 30, 2022.
Under the amended ordinance, those who purchase housing units or plots also get a six-month exemption in revealing their source of income.
Electronic notices will also not be issued to taxpayers for investments in the construction sector. Builders or developers will be able to register the project through the FBR website by December 31. According to the FBR, projects worth trillions are in the pipeline.
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 a seminar on the ‘PM’s Package on Naya Pakistan Housing Scheme’ at the Association of Builders and Developers House on October 7.
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 June 30, 2021 after the extension 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.
Analysts have been attributing high cement sales to the construction package. Over 60 allied industries get a boost when construction does well. Low-cost housing projects developed by the Naya Pakistan Housing and Development Authority will be charged almost 90% lower taxes.