Senior Vice Chairman ABAD Muhammad Hassan Bakshi and former Senior Vice Chairman Arif Yousuf Jeewa also responded to different queries of media. He said that members of ABAD have deposited Rs 150 million as 5 percent advance tax under the FTR during last four months of current fiscal year, which reflects a total FTR of Rs 3 billion, while the ABAD had committed to the FBR that this sector will pay Rs 2 to 3 billion of the tax. He said, "We have also said last year that the construction sector is paying almost Rs 80 million of minimum tax, which will be increased ten times if a corruption free Fixed Tax Regime is implemented for builders and developers. But before this new mechanism could start working, the FBR brought the issue of new property valuation virtually blocking the way of new construction for almost six months and we could get NOCs for new construction from January 2017 and members of ABAD have paid Rs 150 million as 5 per cent FTR during four months and 20 days. In all the real estate sector has paid total taxes of Rs 18.50 billion under various sections of Income Tax Ordinance including section 7-C, 7-D, 236-C, 236-K and 236-W."
Moreover, industry expects Rs 4 billion tax more collection from this sector during the last one month and ten days of current fiscal year, which will bring to a total collection of Rs 22.50 billion. "Thus you can judge how much this sector is contributing to the national kitty," he added. On the other hand, it is a fact that members of ABAD are involved in 25 per cent of all construction activities of the country while other players are responsible for 75 per cent construction throughout the country. He said that members of ABAD are more than willing to pay taxes and the government should give chance to FTR for at least three years instead of taking any decision on the basis of four months. The FBR should not press only ABAD members to realise tax target but also put its own mechanism to get advance tax from other people all over country who are going to construct a building or a house, he said adding that the government accepted only two suggestions of ABAD for current fiscal year instead of four suggestions of the association. Had the government accepted all four suggestions, tax collection could have been far better, he lamented.
Talking about low cost social housing, being built by ABAD, Mohsin Sheikhani said that at present Pakistan is facing a shortage of 12 million houses and almost 0.25 million housing units are added into this shortage every year. He said, "If we only count on shortage of houses, it is a 180 billion dollar industry with nominal price of Rs 1.5 million to Rs 1.9 million of each house depending on location and price of the land." He further said the construction industry is providing 2.6 million jobs and if given incentives, it can go up to 5 million and jobs will also enhance in more than 72 allied industries. The ABAD has announced a social project in Islamabad which will be launched soon, he said adding, "We are going to build this project with our own resources but we would like to ask the government to provide free of cost documentation and utilities and facility of One Window for approval etc for the benefit of general public."
He empathetically said that more than 50 percent of Pakistani population is residing in slums, unplanned colonies generally known as Katchi Abadis, which is shameful for the country as well as it creates law and order situation in the country. This is the reason why the ABAD has embarked on low cost housing, he added.
Senior Vice Chairman ABAD Muhammad Hassan Bakshi said that the ABAD had proposed that the government should implement a single property valuation system based on market value all over the country instead of present 3-tier system and tax should be only one percent instead of three percents of tax, which will not just increase the government revenue manifolds but financial institutes will also be able to easily finance housing.
Replying to a question, Mohsin Sheikhani said that income tax officials have created atmosphere of fear among business community by raiding offices of many builders in Karachi during last some months, which is now stopped due to efforts of ABAD, however, they have not returned records of builders yet.
He appealed to Federal Finance Minister Ishaq Dar, Special Assistant to Prime Minister Haroon Akhtar and Chairman FBR Dr Irshad to continue FTR for at least three years because this system will be source of development of the construction industry which ultimately will be beneficial for national exchequer by creating thousands of jobs. Speaking on this occasion, Arif Jeewa said that the FBR should forget the past practice for collective good of the country. The economy relies on enhanced business activities while highhanded practice will force businessmen to look at other possibilities of investment and capital flight from Pakistan may start, he cautioned.
Copyright Business Recorder, 2017