Dr Tariq Masood, Chief Commissioner Inland Revenue (CCIR), has assured the delegation of Association of Builders and Developers of Pakistan (ABAD) to forward a proposal of allowing 20 per cent tax relief in case of total fixed tax payment in advance.
Speaking to the ABAD delegation, who came to his office for voluntary tax payment on the other day, he said that he would recommend the Federal Board of Revenue (FBR) to allow up to 20 per cent tax relief to those builders and developers who would pay total fixed tax in advance. The ABAD delegation led by senior vice chairman Muhammad Hassan Bakshi, chairman southern region ABAD Muhammad Ayoob, former chairman Junaid Ashraf Taloo and others. The delegation has paid fixed tax amounting to over Rs 7 million in advance on behalf of some 20 builders, who have recently launched new residential and commercial projects in Karachi. It was proposed by the ABAD in its budget proposal 2016-17 to introduce fixed tax regime (FTR) for construction industry in order to streamline taxation system for the builders and developers. According to the approved FTR, the builders and developers have to pay a fixed tax from Rs 25 to Rs 70 per square foot for residential projects and Rs 210 per square foot for commercial projects. Some five percent of the FTR is payable in advance after approval of building plan while rest of the FTR is to be paid in equal installments of four months depending on completion period of the project. Dr Tariq said that around Rs 7-8 billion would be realized from builders and developers on account of FTR during the current financial year and if this target was met, he would recommend the FBR to allow up to 20 per cent tax incentive to those builders and developers who would pay total fixed tax in advance and promote tax culture among the fraternity of construction industry. Meanwhile, Muhammad Hassan Bakshi said that ABAD would continue supporting the FBR for tax collection.
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