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ISLAMABAD: The government needs to create a special position of ‘Advisor to the Prime Minister on Real Estate and Construction’ under the caretaker setup to effectively deal with the complex taxation matters being faced by the real estate sector, say tax experts.

They told Business Recorder that the frequent changes in the tax policy for the construction sector and real estate have complicated the issues for taxpayers.

The abrupt changes in the tax regime for real estate and the increase in taxes on buying and selling of properties have further confused the issues. There is an uncertain situation in the real estate sector.

The ground realities of the complex taxation matters can only be understood by the person dealing in real estate matters.

The insertion of section 7E of the Income Tax Ordinance, 2001, has resulted in a panic-like situation in the real estate markets.

In the absence of a relevant and qualified person to be appointed to the said position, nobody else is able to promptly address the day-to-day matters of the real estate sector.

The Federal Board of Revenue (FBR) being the revenue collection agency is not aware of the practical difficulties being faced by the taxpayers. Therefore, someone experienced and an expert from the real estate sector should be appointed as the Advisor to the Prime Minister on Real Estate and Construction under the caretaker setup.

The proposed advisor should be responsible for handling all the taxation-related matters of the sector in consultation with the FBR. The position should have the authority to take prompt decisions in consultation with the FBR and the provincial revenue authorities.

The person appointed to the said position can simultaneously interact with the stakeholders as well as government departments to take immediate action on the issues being faced by the construction sector as well as the real estate business.

Copyright Business Recorder, 2023

Comments

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Nasim Beg Aug 01, 2023 11:47am
It would be important to differentiate between the unproductive speculation in PLOTS, which is seriously damaging the economy. The taxation on deemed rental on plots is a very good measure, we need to see more of such innovative measures. The documented real estate development sector is productive and tax compliant. Any undocumented activity needs to be brought into the tax net by FBR. As it should bring traders and retailers in other business areas. Plot trading and hoarding should be termed "Plot Trading & Speculation Business" and not, real estate which has a different connotation worldwide.
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Khalil Ahmad Aug 03, 2023 12:12am
I agree with the proposal being a need of the time and practically, technically and direly required.
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