Main Points of Relief Package For Construction Industry 2020:
On 3rd April 2020, PM Imran Khan announced the relief package for the construction industry in order to create new opportunities and jobs to tackle on going economic crises.
He said the construction industry is the second largest industry in Pakistan after agriculture therefore a lot of people are associated with them. Construction sector holds a great amount of potential and large portion of population depends upon it for their living.
Prime Minister Imran Khan announced incentives as mentioned below:
- The people who invest in the construction industry now will not be questioned about their source of income. Through this incentive, house so as industrial construction will become much easier than before and provide better employment opportunities.
- Fixed tax will be introduced in this scheme, which was also introduced earlier but never implemented. As a result Fixed tax will attract investors to invest in the construction industry as there will be no hidden charges.
What is Fixed Tax?
A tax that is charged at the same rate on everyone or everything, whatever their income, profit, etc.
Naya Pakistan Housing scheme which aims to build five million cost effective houses will have a positive impact as 90 percent fixed tax would be waived off and investor would have to pay only 10 percent tax if he decides to invest in this housing scheme.
- There will be no capital gain tax on family residential property.
What is Capital Gain Tax?
Capital gains tax is a levy assessed on the positive difference between the sale price of the asset and its original purchase price. Long-term capital gains tax is a levy on the profits from the sale of assets held for more than a year. Source: Investopedia
There will be a fixed tax rate for builders and developers. The fixed tax will be charged on Square feet for constructed buildings and per square yard for housing schemes. This step will provide ease to the builders so as the people who would be buying houses.
- PKR 30 billion in subsidy for NPHP; Capital Gains Tax (CGT) will be waived for families selling their houses.
- One Window setup to be created for the floor plan approval, which will speed up the process and decrease the time to one month. This step would provide ease of doing business to investors, builders, and regulatory bodies.
This construction package was much awaited by the stakeholders and in some places has been called “historic”. In reference to this package Z Hasan Enterprises has designed various customized packages. Do not forget to check them out!