Housing sector: ABAD presents its budget proposals
Asks for reduction in duty, registration fees, indirect taxes.
ABAD Chairman Mohsin Sheikhani said that the incidence of indirect taxes is on the higher side in Pakistan compared to regional countries. PHOTO: FILE
KARACHI:
Association of Builders and Developers of Pakistan (ABAD) Senior Vice Chairman Salim Patel has asked the government to ensure that the presumptive tax on construction companies should not be more than 1% on yearly receipts and that its recommendations are implemented fully in real terms.
He said this while speaking at a press conference on ABAD’s budget proposals.
Patel said that while construction activities have risen in the country, the government needs to act to also simultaneously increase the pace of development. For instance, reduction in stamp duty registration, registration fee on housing mortgage and duties on construction materials be rationalised to increase construction activities in the country.
He urged the State Bank of Pakistan to direct commercial banks to allocate a certain percentage of credit to the housing sector. “At current cement prices and the high mark-up rates, it is very difficult to ensure housing finance at a reasonable rate even for the middle class of the country,” he stressed.
‘Reduce indirect taxes on steel, cement sectors’
The government must maintain the sales tax on housing and construction material, such as steel, at the same level to support massive construction of infrastructure in the country. Also, the government must reduce withholding tax on taxable supplies from the present 4% to flat rate of Rs200 per ton, which will spur investment and documentation.
ABAD Chairman Mohsin Sheikhani said that the incidence of indirect taxes is on the higher side in Pakistan compared to regional countries. At present, the cement industry, is paying indirect taxes like excise duty of Rs400 per ton and sales tax at 17% (under 3rd schedule). Since sales tax is calculated on excise duty paid value, which further enhances the impact of this tax to the end user, after the imposition of sales tax there is no justification of keeping the excise duty intact and it should be abolished, he added.
Published in The Express Tribune, May 16th, 2014.
Association of Builders and Developers of Pakistan (ABAD) Senior Vice Chairman Salim Patel has asked the government to ensure that the presumptive tax on construction companies should not be more than 1% on yearly receipts and that its recommendations are implemented fully in real terms.
He said this while speaking at a press conference on ABAD’s budget proposals.
Patel said that while construction activities have risen in the country, the government needs to act to also simultaneously increase the pace of development. For instance, reduction in stamp duty registration, registration fee on housing mortgage and duties on construction materials be rationalised to increase construction activities in the country.
He urged the State Bank of Pakistan to direct commercial banks to allocate a certain percentage of credit to the housing sector. “At current cement prices and the high mark-up rates, it is very difficult to ensure housing finance at a reasonable rate even for the middle class of the country,” he stressed.
‘Reduce indirect taxes on steel, cement sectors’
The government must maintain the sales tax on housing and construction material, such as steel, at the same level to support massive construction of infrastructure in the country. Also, the government must reduce withholding tax on taxable supplies from the present 4% to flat rate of Rs200 per ton, which will spur investment and documentation.
ABAD Chairman Mohsin Sheikhani said that the incidence of indirect taxes is on the higher side in Pakistan compared to regional countries. At present, the cement industry, is paying indirect taxes like excise duty of Rs400 per ton and sales tax at 17% (under 3rd schedule). Since sales tax is calculated on excise duty paid value, which further enhances the impact of this tax to the end user, after the imposition of sales tax there is no justification of keeping the excise duty intact and it should be abolished, he added.
Published in The Express Tribune, May 16th, 2014.