close
Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!
October 2, 2020

Govt links amnesty to builders with project completion

Business

October 2, 2020

KARACHI: The government has exempted builders from disclosing source of investment if they complete new housing projects within less than two years, a top tax official said on Thursday.

Abdul Hameed Memon, chief commissioner of Inland Revenue at Medium Taxpayers Unit Karachi told media that the money whitening scheme for new housing projects will only be valid if the projects are complete within 21 months.

“The immunity for undisclosed money for utilising in a new housing project is only valid if the project is complete by September 2022,” Memon said after a session with builders and developers from Sindh and Balochistan on the tax relief package.

“The FBR (Federal Board of Revenue) will not ask for a source of investment from developers and builders if they deposit money in a new bank account by December 31 for a new housing project.”

The tax official said the government through amendment in tax laws announced the relief package for the construction sector.

The package has two types of benefits: immunity from questioning the source of investment; and reduced rate of income tax in the shape of a fixed tax regime for builders and developers.

The chief commissioner said the package will help in enhancing activities in the construction sector and result in significant economic growth.

The tax official shared presentation with builders and developers on the immunity from a section 111 of Income Tax Ordinance 2001. The section attracts penal action for individuals who conceal assets from tax authorities.

The commissioner said the section 111 would not apply to an individual if the individual deposits the money in a new bank account up to December 31 or has ownership / title of the land invested as on April 17.

In case of a company or an association of persons, the section would not apply if a single purpose company or association of persons is registered between April 17 and December 31.

The commissioner said there are other exemptions and benefits under the tax package and the investors would have exemption from the requirement of withholding tax on purchase of building material except cement and steel. They will have exemption from the requirement of withholding tax on acquisition of services relating to construction except those from companies.

Individuals, who are engaged in low cost housing projects, will be granted 90 percent reduction in fixed tax liability, the commissioner said. Besides, dividends paid by builder or developer companies will not be liable to tax and there will be no withholding on the payment of these dividends, he said.