LAHORE: Section 203-A of the budget 2021-22, which gives powers to arrest and prosecute any person for concealment of income to assistant commissioners of Inland Revenue Service merely based on an accusation or doubt, should be withdrawn immediately. In addition, the government should abolish the proposed 20% gain tax on the real estate sector. Policies formulated without stakeholder consultation can never succeed.
These views were expressed by Khawaja Shahzeb Akram, Senior Vice President, Muhammad Ali Mian, Coordinator and Maj Muhammad Rafiq Hasrat (retd), Convener of the standing committee on "Property & Construction of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) while addressing the joint press conference here on Tuesday at FPCCI Regional Office Lahore.
They said that Overseas Pakistanis invested heavily in real estate and sent record remittances in 2020-21. In addition, almost 29 billion dollars were received in government exchequer, thereby boosting our foreign exchange reserves. The federal government in the Budget 2021-22 has proposed drastic changes which will result in the collapse of real estate business, and trillion of rupees invested in real estate will get stuck for a long time.
Losses of investors will be colossal and unbearable. Overseas Pakistanis will also suffer heavily and will stop investing in real estate. Heavy losses in real estate will discourage overseas Pakistanis, and the flow of remittance will be badly affected, they added.
Referring to the shutdown of gas to industries, Shahzeb Akram said that due to untimely action of the government regarding LNG and CNG, industries are facing a shortage of gas.
Maj Muhammad Rafiq Hasrat (retd), Convener of the FPCCI standing committee on "Property & Construction, said that previously the maximum rate of tax on profit on real estate business was 10%, and it was calculated in a receding manner. After three years, the tax on profit from the sale of the property was zero%.
He further said that Overseas Pakistanis should be given a special rebate on investment in Pakistan. The proposals in the current Finance Bill proved to be detrimental to the real estate and construction sectors. The decline in the real estate business will also reduce the government's income tax revenue.
He further said that even 10% maximum gain tax has brought irreparable damage to the real estate market and all the people connected therewith. Therefore, the maximum gain tax should not be more than 8 percent. He further said that government must protect the real estate sector.
Copyright Business Recorder, 2021