PM announces New Years’ gift for the construction industry.

ISLAMABAD: Prime Minister Imran Khan on Thursday gave a ‘new year gift’ to those associated with the construction sector by announcing that the fixed-tax regime for them has been extended by another year till Dec 2021 and the facility of non-disclosure of a source of income while making investment till June 2021.

The prime minister also gave a one-year extension to construction projects which were supposed to be completed in 2022 and now they can be completed by 2023, the last year of the five-year term of the Pakistan Tehreek-i-Insaf-led government.

“I want to give [the construction sector] good news for the new year that we have extended the fixed tax regime to Dec 31, 2021,” the prime minister said in a live address to the nation.

He said this had been a big demand of the construction industry which was the key to offset the negative impact of the Covid-19 pandemic on the national economy.

“It was a big demand of the construction sector that the fixed-tax regime should be extended as the facility has not been availed in a real manner due to Covid-19’s impact,” he added.

The government had introduced the fixed tax-regime for the construction sector till Dec 31, 2020.

Prime Minister Khan said he was happy to announce that projects worth Rs186 billion had been registered with the Federal Board of Revenue (FBR) to take benefit of incentives given to the construction sector in April. Other projects worth Rs116bn were in the process of registration with the FBR, he added.

He said that Rs160bn construction projects had been launched in Punjab. “This will generate economic activities equivalent to Rs1,500bn only in Punjab and will create 250,000 jobs,” he said, adding that similar projects had also been started in Khyber Pakhtunkhwa, Karachi, and Balochistan.

Talking about the incentives his government had given to people, the prime minister said the government had announced packages for low-cost housing for salaried people who were previously unable to afford houses. “Its first success was the foreclosure law. For the first time in Pakistan, banks are financing houses. Banks have vowed to allocate Rs378bn for construction activity till Dec 31, 2021,” he added.

Mr. Khan said the subsidy is given for low-cost housing [would remain in place] and the interest rate would not be more than five percent on houses of five marlas and no more than 7pc for houses on 10 marlas.

“For the first 100,000 houses that will be built [under this scheme], we have decided to give Rs300,000 per house,” he added.

He said the date for completion of construction projects had also been extended allowing people to invest in the construction sector without disclosing the source of income.

According to the FBR, the fixed-tax scheme is applicable to the builders and developers who opt for the scheme by registering their projects with the FBR. Builders and developers eligible for the fixed tax scheme include individuals, a company, or an association of persons.