KARACHI: Chairperson of the Association of Builders and Developers of Pakistan (ABAD) Asif Sumsum has announced to go to the court against heavy and unreasonable taxes imposed on the construction industry and the real estate sector in the FY25 budget, said a statement on Tuesday.
The chairperson of ABAD says that the budget will be destructive for the construction industry and real estate in the country. “It is not only difficult but also impossible for ordinary people to build their dream house. Can you say that a house built on a 60-, 80- or 120-yard plot is a luxury?”
Sumsum said that this decision has stopped investment in the construction and real estate sectors and that local industries associated with construction will also be severely affected, and as a result, millions of people will be left unemployed, adding that if the burden of taxes is not reduced, investments made by overseas Pakistanis in this sector will be transferred to other countries, which will reduce foreign exchange inflows.
Per Sumsum, ABAD had serious reservations about the budget presented in the National Assembly and had submitted its proposals to the government for the improvement of the economy, but instead of giving relief to the construction industry, the government imposed more taxes which affected the construction industry. This step, according to the chairperson, will prove to be the last nail in the coffin.
Sumsum said that it is completely unfair to levy up to 60 per cent tax and 3.0 per cent Federal Excise Duty (FED) in the budget when 6-7 per cent tax on the sale and purchase of property is already in place. He said that whatever suggestions ABAD gave to the government were to increase investment and foreign exchange reserves in the country.
“We love Pakistan, and we want Pakistan to develop and be prosperous. But no attention was paid to our suggestions. The construction and real estate sectors are the most important part of the country’s economy, and if they get damaged, it will have negative effects on the country’s economy.
After the implementation of Section 7E, remittances from overseas Pakistanis have already reduced drastically. He said that due to heavy taxes on the construction sector, it has become impossible for the citizens of Pakistan to build their houses.
There is already a shortage of more than 10 million houses in Pakistan. The basic responsibility of the government is to provide housing facilities to its citizens. If the government cannot fulfil this responsibility, it should provide protection to the construction sector.
Asif Sumsum said that after this decision, there will be an even more increase in the number of slums; Karachi is already full of slums. He said that if the slum population increases by 50 per cent, the crime rate increases as well.
He appealed to the government and authorities to withdraw the taxes imposed on the construction sector and to remove the taxes on 60-, 80- and 120-yard houses and 1200sq ft residential flats. The exemption should be given so that the country’s economy could develop; the nation becomes prosperous; and Pakistan’s economy can get rid of the IMF.