FPCCI asks govt to withdraw 20pc gain tax

LAHORE: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday demanded withdrawal of Section 203A against concealment of income and the proposed 20 percent gain tax on the real estate sector in budget 2021-22.

FCCI standing committee on property and construction in a joint press conference held at FPCCI’s regional office in Lahore demanded removal of Section 203A, which empowers Inland Revenue Service assistant commissioners to arrest and prosecute any person for concealment of income. They also demanded the government to abolish the proposed 20 percent gains tax on the real estate sector in budget 2021-22.

Committee convener major (retd) Muhammad Rafiq Hasrat and FPCCI Senior Vice President Khawaja Shahzeb Akram said that policies formulated without stakeholder consultation never succeed.

They said that oversees Pakistanis invested heavily in the real estate sector, and the country received record remittances in 2020-21. In addition, almost 29 billion dollars were received in government exchequer, thereby boosting foreign exchange reserves.

“The federal government in budget 2021-22 has proposed drastic changes which will result in the collapse of real estate business, and trillions of rupees invested in real estate will get stuck for a long time,” they said. “Losses of investors will be colossal and unbearable.”

Overseas Pakistanis would also suffer heavily and stop investing in real estate. Heavy losses in real estate would discourage overseas Pakistani, and the flow of remittances would be affected negatively, also impacting overall remittance inflows, they added.

Hasrat said that previously the maximum rate of tax on profit on real estate business was 10 percent, and it was calculated in a receding manner. After three years, the tax on profit from the sale of the property was zero.

He further said that overseas Pakistanis should be given a special rebate on investment in Pakistan. The proposals in the current Finance Bill proved to be detrimental to the real estate and construction sectors.