Purchase of plots in new sectors of Islamabad: Overseas Pakistanis demand waiver of WHT/FED

ISLAMABAD: The overseas Pakistanis have demanded a waiver from withholding taxes/Federal Excise Duty (FED) and payment in Pak rupee for first time purchase of plots in new sectors of federal capital.

Tax experts told Business Recorder that the overseas Pakistanis especially those who have been successful in balloting of CDA Sector C-14 have demanded that the development package for the real estate and housing sector to be announced soon and withholding tax wavier to overseas Pakistanis is given apart from allowing payment in Pakistani rupee instead of UD dollars.

As per CDA sources, tax experts informed that the payments in US dollars from the allottees are not forthcoming and CDA is receiving requests to allow payment in Pak Rupees rather high court has been moved in this regard.

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The background facts are that CDA recently held balloting of its sector C-14 wherein priority was given to overseas Pakistanis and as per intimation letter issued to successful overseas Pakistanis payment is acceptable in USD only and that too from abroad through banking channel within 30 days of the intimation letter dated 15 January 2025.

Whereas these days the Federal Government had constituted a task force to suggest recommendations for development of real estate and housing sector. The Prime Minister is chairing a meeting on February 3, to consider 40 plus recommendations of the task force.

When contacted for comments Shahid Jami, a tax consultant explained that apart from provincial taxes and stamp duty a buyer is required to pay 4 per cent withholding income tax apart from FED and though income tax is adjustable yet since overseas Pakistanis usually don’t have Pakistan source taxable income therefore the tax collected is refundable on filing of “NIL” return and to obtain income tax refund is mission impossible for residents too what to say of non-resident.

Jami stated that all over the world first time buyer are given tax waiver on buying residential property whereas there is no such concession in Pakistan where first time buyer will prefer to buy plot and then make construction as one earns.

Jami explained that overseas Pakistanis regularly send remittances to Pakistan and invariably they do not have liquid funds abroad to make payment in US dollars through banking channel which will also incur over two per cent banking charges.

Jami urged the Federal and Provincial government to give meaningful practical incentive otherwise giving preference merely is a farce.

“Overseas Foundation of Pakistan has failed to deliver and there should be a separate Overseas Housing Authority of the pattern of DHA to acquire land and develop housing schemes for the overseas working class,” Jami observed.

Copyright Business Recorder, 2025