Tax incentives, regulatory reforms proposed to boost investment

ISLAMABAD: A major real estate developer has urged the government to offer a 10-year tax exemption or reduced tax rates, profit repatriation guarantees, and a streamlined regulatory framework under the Special Investment Facilitation Council (SIFC) to attract multimillion-dollar investments in Pakistan’s housing and construction sector.

Tarek Hamdy, CEO of EIGHTEEN Housing Project, emphasised the need for policy consistency and investor-friendly measures during a discussion with reporters on Friday.

The Egypt-based developer, who has been operating near the New Islamabad International Airport for eight years, highlighted bureaucratic hurdles and contradictory regulations as key obstacles.

Hamdy pointed out the lack of synchronisation among federal and provincial departments, where developers face difficulties obtaining No-Objection Certificates (NOCs) due to conflicting requirements.

Calling the SIFC a “positive step,” Hamdy proposed establishing a dedicated real estate regulator under its umbrella to ensure predictability for foreign investors.

When asked about potential IMF resistance to tax exemptions, Hamdy suggested negotiating incentives for large-scale investments (e.g., $100 million+). If full exemptions are unfeasible, reduced tax rates could be an alternative, coupled with profit repatriation guarantees to attract foreign capital.

Hamdy criticised revenue authorities like the FBR and Punjab Revenue Authority for conducting “baseless raids” on developers, undermining investor confidence. He cited a case where allegations against EIGHTEEN were dismissed in court due to lack of evidence, calling such actions “counterproductive to economic growth.”

He also raised alarms over fraudulent housing schemes, which exploit overseas Pakistanis through fake projects. To combat this, he proposed a centralized digital registry of all approved housing societies, ensuring transparency and protecting investors.