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Federal cabinet approves ordinance giving big package to construction industry

Federal cabinet approves ordinance giving big package to construction industry
April 17, 2020
ISLAMABAD (92 News) – The federal cabinet has approved an ordinance giving a big package to the construction industry. According to the ordinance, a fixed tax regime is being introduced for builders and developers. There will be no withholding tax on the construction material except cement and steel. Provision of services has been exempted from withholding tax. Sources of income will not be inquired from the investor on making investment in the construction industry. However, the ordinance will not be applicable on the money of crimes and terrorism. As per the ordinance, tax has been reduced by 90 percent for low cost houses to be constructed under Naya Pakistan Housing Authority. This incentive package will be applicable for the projects to be initiated before the end this year as well as the ongoing incomplete projects, which will get themselves registered under this scheme. The builders and developers will have to get their new and ongoing projects registered with the Federal Board of Revenue (FBR) through IRIS web portal. One time exemption has been given on capital gain tax for the house measuring 500 square yards and flat of 4000 square yards. The construction industry will be eligible to avail the same kind of facilities available to other industries for the import of plant and machinery. Advance tax on auction of properties has been reduced to five percent from 10 percent. Sales tax on construction services in the federal capital territory has been brought to zero on the pattern of Punjab. Exemption has also been given on capital value tax in the federal capital territory on the pattern of Punjab and Khyber Pakhtunkhwa provinces. Prime Minister Imran Khan had announced a big package for the construction industry earlier this month in order to increase employment opportunities in the country in the wake of coronavirus outbreak. Meanwhile, the cabinet approved another ordinance against profiteers. Under the ordinance, profiteers will be awarded imprisonment for three years. Moreover, 50 percent of the confiscated items will be imposed as fine. The ordinances have been sent to President Dr Arif Alvi for approval.
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