By Our Correspondent
LAHORE – The Lahore Chamber of Commerce and Industry has organized an important seminar on “Real Estate Taxation” to highlight challenges being faced by this sector and their doable solutions.
Chairman Prime Minister Task Force for Housing Hafiz Muhammad Nauman, LCCI President Mian Abuzar Shad, Vice President Shahid Nazir Chaudhry and Convener of the Real Estate Standing Committee Muhammad Rafiq Hasrat spoke on the occasion while a large number of stakeholders participated the seminar. All the stakeholders deliberated on the sector’s tax-related issues and explore viable solutions to boost investment and drive growth.
Speaking at the event, Hafiz Muhammad Nauman revealed that he had recently met with Prime Minister Shahbaz Sharif to address the taxation challenges in the real estate sector. The Prime Minister has directed the formation of a task force to find out the solutions.
He also talked highly about the federal and Punjab governments’ initiatives to promote the construction and real estate sectors, acknowledging their critical role in driving economic activity and creating employment opportunities.
LCCI President Mian Abuzar Shad and Vice President Shahid Nazir Chaudhry voiced serious concerns over the heavy taxes imposed on the real estate sector which have stifled investment and growth and presented tax relief demands.
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They stressed the need to restructure the taxation system to create a more favorable investment climate.
LCCI President Mian Abuzar Shad suggested lowering the rate to a uniform 1% and called for significant cuts to make property transactions more affordable. He urged the government to complete remove or reduce the Federal Excise Duty to 1% to encourage investment.
They stressed that these reforms would not only attract domestic and foreign investors but also provide a much-needed boost to the allied industries connected to the construction and real estate sectors.
Convener of the LCCI Standing Committee on Real Estate Muhammad Rafiq Hasrat, delivered a detailed briefing on the existing tax framework and its implications. He shed light on the complexities of profit taxes, capital gains taxes, federal excise duties and advance sales taxes on property transactions.
He said that the introduction of additional taxes under the Finance Act 2024, coupled with increased tax rates, have slowed down real estate activities. Investors are hesitant to make new commitments, resulting in stagnation across the sector.
Mian Abuzar Shad underscored the broader economic implications of a struggling real estate sector. He said that the construction sector is the backbone of our economy and is directly linked to over 50 allied industries. When the real estate sector thrives, it generates a multiplier effect, creating jobs and boosting economic activity across various sectors. He said that the relief to the real estate would supplement the government efforts aimed at promotion the construction sector.
The seminar concluded with a strong appeal to the government to prioritize the revival of the real estate sector by providing immediate tax relief and introducing investor-friendly policies.
President Mian Abuzar Shad appreciated the federal and provincial governments’ focus on the construction industry but emphasized that meaningful progress would only be achieved by alleviating the tax burden on the sector.
He said that the real estate sector has the potential to transform Pakistan’s economy. It is imperative for the government to address these taxation issues urgently to unlock this potential.
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