ABAD slams taxes on real estate

KARACHI: The Association of Builders and Developers of Pakistan (ABAD) has said that to save the country from bankruptcy, the government is pushing all businesses, including the construction industry, towards bankruptcy.

ABAD has criticized the government for increasing property and sales taxes and not abolishing Section 7E of the Income Tax Ordinance.Chairperson of ABAD Asif Sumsum said that “the budget is a big blow for the construction industry. The proposed financial measures presented in the budget will put a heavy financial burden on not only the construction sector but also other sectors including real estate,” adding that the increase in property and sales taxes will not only increase construction costs but also affect investment in this sector. “The proposed financial measures will prove to be harmful for the economy of Pakistan.”

According to Sumsum, an increase in sales tax will make construction materials more expensive. “The prices of construction products have already doubled in the last few years; now they will be even more expensive,” he shared and added that there is a shortage of 12 million houses in Pakistan. “The rising costs of construction products will increase costs for builders and developers which will inevitably be passed on to home buyers, making home ownership a distant dream for ordinary people.”

Sumsum said that “the construction sector plays an important role in GDP growth and employment generation. We demanded the government to abolish Section 7E, but we did not hear anything. Foreign investment in Pakistan has received a big blow due to this amendment. Overseas Pakistanis have started investing in the construction sector of other countries instead of investing in Pakistan.”He said that the construction sector is a powerful engine for economic recovery because 70 per cent of the investment in the construction sector is for buying construction materials.