Real estate builders and developers have been given a one-week deadline to pay their taxes per the Federal Board of Revenue (FBR)’s new rules. The deadline expires on Monday, October 31, 2016.
In response to this, Association of Builders and Developers (ABAD) has threatened to close down all construction activities in the country if the new property valuation mechanism isn’t deferred for the current fiscal year.
According to a press release, ABAD Chairman Mohsin Sheikhani has demanded the government restore the old tax regime until the next budget and requested the Sindh Building Control Authority (SBCA) to withdraw betterment charges. He further stated that SBCA is not a development authority that can levy these charges on builders.
He revealed that over 60% construction activities of worth PKR 100 billion in the country have come to a halt due to the new property tax rules set for real estate builders. According to Sheikhani, the construction industry pays almost 7% of the project cost as bribe, which in turn increases the cost of buying property for genuine buyers.
Sheikhani emphasised that in addition to pausing construction activities, ABAD also holds the right to take FBR to court. The press release also highlighted the fact that the DC Rates of properties for the purpose of tax calculation have been in place for 63 years and they cannot be changed overnight.
The press release pointed out that House Building Finance Company doesn’t approve loans for houses worth more than PKR 1.5 million and the loan amount has also been restricted to PKR 1.275 million. It further stated that despite court orders, Sui Northern Gas Company isn’t providing new connections to the residential societies.
ABAD also fears that the imposition of new taxes on property transactions will encourage capital flight to other countries.
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The argument seems to be poor and missing the logic. This is how most of the businesses are operating in Pakistan and tends to exploit. These were the people who negotiated with the Govt. in the beginning and claimed to have achieved the milestone and now ????
Aamir, see the dunya tv Kamran khan show whereby ABAD detailed point of view is available
THIS IS THE BLACKMAIL MAFIA WHO DOES NOT WANT PRICES TO FALL AND WANT ONLY INVESTORS TO BUY AND NOT THE GENUINE BUYERS
Wait and see. Prices will come down to 70%. Nobody can stop this falling now.
KEEP IT UP, TAXES GO IN THE POCKETS OF CORRUPT GOVERNMENT..
WE WILL NOT BUYOR BUILT PROPERTIES IN CURRENT TAX SYSTEM.
I don’t even understand why federal government even has the authority to tax property especially after 8th Amendment.
This right should be given to local governments so each district can propose tax according to their needs and will of the local citizens.
Also people will be more willing to pay such tax as implementation process will be transparent and they will be able to see their property tax being utilized among their own communities instead in some black hole in pockets of someone in Islamabad.
Devolve and let local government take care of this!