Islamabad: According to media sources, the Board of Investment (BoI) held a housing and construction seminar in Dubai on Tuesday (November 2) to attract investors to study Pakistan’s housing sector.
According to the information provided at the conference, the annual need for housing in the country is over 700,000, but barely half of this demand is met. Fareena Mazhar, Secretary of the Board of Investment, encouraged investors to take advantage of the incentives, including massive tax-based rebates under the Tax Laws Amendment Ordinance 2020, and ease of project approvals through the Naya Pakistan Housing and Development Authority’s one-window operation (NAPHDA).
The secretary of the Treasury explained that qualifying builders and developers will be exempt from withholding taxes on the purchase of construction materials. It was also announced that any tax due on earnings, income, or gains from low-cost housing projects would be reduced by 90%.
Furthermore, BoI Secretary Mazhar said that the Income Tax Ordinance has been changed to declare the building industry as an industrial venture, allowing it to benefit from the same tax breaks as other industries.
She went on to say that for the promotion of the construction and housing sector in Pakistan, the State Bank of Pakistan has decided to advise mandatory targets for the banks. Under this initiative, every bank will make sure that the financing for the construction of buildings and housing must be at least 5% of their domestic private sector credit by December.