Karachi: The federal government’s decision to abolish Federal Excise Duty (FED) on the sale and purchase of property has been met with appreciation from the construction sector, with the Association of Builders and Developers of Pakistan (ABAD) calling it a step in the right direction.
ABAD Chairman Hasan Bakshi lauded the move, stating that the removal of FED would reinvigorate the construction industry and create much-needed employment opportunities. He also urged the government to consider additional tax reforms to sustain momentum in the real estate and construction sectors.
Specifically, Bakshi called for reductions in taxes imposed under Sections 236C and 236K of the Income Tax Ordinance, 2001, which deal with advance tax on the sale and purchase of property. He also proposed easing Section 7E, which has imposed significant tax burdens on property ownership.
He emphasized that while the scrapping of FED is a positive development, broader policy measures are required to unlock the full economic potential of the construction sector. “The construction industry is one of the key drivers of job creation. If supported with progressive tax reforms, it can play a transformative role in Pakistan’s economic revival,” he said.
Bakshi also referenced the recommendations put forth by the government’s economic task force, describing them as crucial for long-term investment stability. He noted that consistent and competitive tax policies are essential for Pakistan to attract sustained investment in a regionally competitive market.
The announcement comes amid ongoing federal budget preparations for FY2025-26, where the government is also reportedly exploring tax relief measures for the salaried class. However, such relief may be subject to approval from the International Monetary Fund (IMF).
The construction sector, a significant contributor to GDP, has long demanded reforms to reduce the tax burden and stimulate activity. The removal of FED is seen as a major win for developers, but stakeholders like ABAD continue to push for a more comprehensive reform agenda.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
