ISLAMABAD: President Islamabad Chamber of Commerce and Industry Sardar Tahir Mehmood has welcomed the landmark decision declaring Section 7-E of the Income Tax Ordinance 2001 unconstitutional, stating that the move would provide a major relief to the real estate sector and restore investors’ confidence.
Talking to visiting business community leaders belonging to the real estate sector here on Friday, he said that Section 7-E had empowered the Federal Board of Revenue (FBR) to impose tax on “deemed income” from immovable properties even when property owners were not actually earning any income from them. He termed the court’s verdict a positive development for the economy, particularly for the real estate and construction sectors which had suffered badly due to the controversial provision.
Sardar Tahir Mehmood observed that the real estate sector is one of the key drivers of economic activity and supports dozens of allied industries including steel, cement, tiles, paint, transport and labour. He added that the imposition of tax on assumed income had created uncertainty among investors and discouraged genuine investment in the property market.
He expressed the hope that after the abolition of Section 7-E, investment activities in the real estate sector would regain momentum, leading to increased business opportunities, employment generation and higher economic growth. He also urged the government to formulate business-friendly taxation policies in consultation with stakeholders to ensure sustainable economic progress.
On the occasion, Senior Vice President Tahir Ayub said that the business community had consistently raised concerns over Section 7-E, terming it unjustified and detrimental to economic activity. He maintained that the decision would help revive investor confidence and encourage documented investment in the property sector.
Meanwhile, Vice President Muhammad Irfan Chaudhry said that rational and fair taxation policies were essential for promoting investment and strengthening the economy. He added that the business community expects the government to introduce reforms aimed at facilitating taxpayers instead of creating unnecessary hurdles for businesses and investors.
