ABAD hails ‘abolishment’ of FED on property deals

KARACHI: Chairperson of the Association of Builders and Developers (ABAD) Muhammad Hassan Bakshi has welcomed the government’s decision to abolish federal excise duty (FED) on the buying and selling of properties, describing it as a positive and encouraging step for the construction industry.

He said the move would not only support the local construction sector but also pave the way for foreign investment.According to details, the government has decided to eliminate FED on property transactions, which had become a significant obstacle for investors. Many local and international investors had shifted their focus to Dubai and other Gulf countries due to the heavy taxation in Pakistan. Welcoming the government’s decision, Bakshi -- who is also a member of the Prime Minister’s Task Force on Housing -- praised the initiative.

He said that the move would generate new employment opportunities, noting that the construction sector is the second-largest provider of jobs in Pakistan after agriculture. He urged the government to go beyond the abolishment of FED and consider easing taxes under Sections 236C and 236K of the Income Tax Ordinance, 2001.

These taxes, he argued, pose difficulties for both property buyers and sellers. Reducing them would help further stabilise the real-estate market.Bakshi also advised the government to review taxes imposed under Section 7-E to further facilitate investors. He emphasised the central role of the construction industry in national economic development. “If we want Pakistan to be among the world’s emerging economies, we must develop a long-term tax policy that supports the construction sector,” he said.

He added that to attract foreign investors, the government must provide incentives to local industries and enable them to compete internationally. Concluding his remarks, Bakshi said that continued steps to ease tax burdens would significantly enhance confidence in Pakistan’s real estate and construction sectors.