12 June 2022
New Taxes on Real Estate in Budget 2022-23
The Finance Minister Miftah Ismail seconded the views of Prime Minister Shehbaz Sharif, while presenting the Budget in the National Assembly. As during his speech, the finance minister pointed out that the wealth of the majority of rich people was parked in real estate. Terming it a “double-edged sword”, Ismail announced that all people who have more than one immovable property in Pakistan with a value of over Rs 25 million would be deemed to have received a rent amounting to 5% of that immovable property’s fair market value. They would have to pay 1% in tax on this deemed rental income. However, one house of every person would be excluded from this tax.
The government has also proposed the imposition of a 15% tax on capital gains on immovable properties if the holding period was a year or less. The tax would be reduced by 2.5% every subsequent year, eventually going down to zero once the holding period reached six years. The advance tax rate on the purchase and sale of property for filers is proposed to be enhanced to 2% from the current 1%, while it would be 5% for non-filers in the current budget.
Constructors threaten to stop work
Constructors working on various government development schemes have threatened to stop execution of all the projects if their rates are not increased in proportion to the hike in construction material costs. “We will stop work on all the projects across the country if especially the smaller contractors badly hit by the price spiral are not compensated properly, Constructors Association of Pakistan (CAP) president Engr Kamal Nasir told in a press conference his week.
He claimed that projeets worth over Rs 2,500 billion have been affected due to the price hike and also said 26,000 small contractors of category C-5 and C-6 have already stopped working on their respective projects as they are neither in a position to get loans from the market nor can spend from their own pockets on these schemes.
“Malir Expressway to benefit Real Estate Developers”
Terming the Malir Expressway as illegal, speakers have demanded that the government stop the controversial project forthwith, in a seminar titled “An Analysis of the Environmental and Social Effects of Malir Expressway Project” organised by the Urban Resource Centre. They said the whole process of its approval was a farce, while bitterly criticising the government for ignoring local communities in the Malir Expressway project. The speakers also said the project would cause loss of livelihood to local people and damage valuable biological assets.
They alleged that the project aimed at serving only the elite which had been granted a no-objection certificate by the Sindh Environmental Protection Agency in violation of the law concerned. The area of Malir in question, constituted the last remaining agricultural areas of the city and should be protected. “Instead of taking action against the several illegal housing societies that have gobbled up thousands of acres of agricultural land in Malir over the years, the government has taken up a project that entails destruction of several Malir`s villages, their rich biodiversity and ecology”, they opined.
SOPs prepared to prevent wildfires
Minister for Climate Change Sherry Rehman has revealed this week that standard operating procedures (SOPs) for prevention and control of forest fires have been prepared keeping in view the recent fire incidents across the country. The past few weeks have witnessed dozens of small to medium blazes in Swat, Haripur, Khanpur, Lower Dir, Mohmand, Shangla, Mansehra, D.I. Khan, Murree, Islamabad and Rawalpindi districts.
Reportedly, under the new SOPs, the provincial departments concerned had been put on alert in ‘high-risk zones’. The guidelines suggest attributing ‘disaster’ status to forest fires to get an immediate response from national and provincial disaster management bodies. Moreover, it has also been suggested that the relevant authorities establish watch towers, create fire ditches and set up localised control rooms across all forest zones.
Cement Sales dropped again
According to the data released by All Pakistan Cement Manufacturers Associationc cement sales has dropped by 16% year-on-year to 3.32 million tons in May as political uncertainty and soaring prices of inputs slowed down the construction activities across the country. Local cement sales in May were 3.15 million tons compared to 3.2 million tons in May 2021 while exports suffered a decline of 77% to 171,915 tons from 746,550 tons in the same month last year.
Expressing concerns over rising economic and political uncertainty, the Association`s spokesman said the continuous devaluation of the rupee coupled with the skyrocketing prices of coal, electricity and petroleum products is badly affecting the business momentum.
