Overseas Pakistanis invest over $8bln annually in local realty sector: minister

KARACHI: Overseas Pakistanis annually invest at least $8 billion in local realty sector, given its attractive rate of returns, a minister said on Wednesday.

“Overseas Pakistanis are remitting around $18 billion every year out of which an estimated amount of $8 billion to $10 billion is parked in the real estate industry… real estate is most attractive avenue for foreign inflows,” Rana Muhammad Afzal, minister of state for finance and revenue said at a meeting with office bearers of Association of Builders and Developers (ABAD).

The minister however criticized the massive investments in the realty sector, saying “the government and independent experts have reservations on the money invested in this industry as most of the money parked in this segment of the economy is undocumented”.

The minister said the real estate business is not paying its due share of taxes and “this is the major concern and it is not acceptable”.

He advised ABAD office-bearers to focus on providing low-cost housing schemes for common man and assured that the government would provide support in this regard.

On an objection raised by builders and developers that tax officials are harassing them by raising audit objections, the minister said the Federal Board of Revenue (FBR) has developed digital database and conducting audit on the basis of forensic evidence.

The digital databank will eliminate all unethical practices of tax officers, the state minister said, and asked them to help the government in eradicating corruption by identifying corrupt elements.

Afzal said that the government remained in trouble during its entire tenure of four-and-a-half years due to security issues, energy crisis and irresponsible politics. “Despite all these odds, the government was able to achieve higher revenue growth,” he added.

On a proposal to enhance property valuation at a fair market value and reduction in tax rates, he said the government wants to bring the valuation at the open market value.

“But due to massive undocumented economy, it is not possible, at present, to reduce rates.”

The property valuation will be fixed after consultations with stakeholders, he said, adding that there are issues of black money in this sector so it was decided to gradually increase the property valuations.

Talking about the upcoming budget 2018/19, he said the government will present a people-friendly budget. In the next budget, the government will allocate huge funds for the development projects in order to keep up the economic growth momentum.

Commenting on the planned amnesty scheme, he said the government wanted to give a chance to people for bringing back their undisclosed assets into Pakistan.

About the government’s promise regarding provision of 0.5 million low-cost houses, he said it was the manifesto of the party, but due to several issues, including war on terror, this promise was not fulfilled. He; however, said in the next tenure, the PML-N will focus on this important issue.