LAHORE: Lahore Chamber of Commerce and Industry (LCCI) 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.
Hafiz Muhammad Nauman apprised the participants 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 expressed concerns over heavy taxes imposed on the real estate sector which have stifled investment and growth and presented tax relief demands.
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 one percent and called for significant cuts to make property transactions more affordable. He urged the government to abolish or reduce the Federal Excise Duty to one percent to encourage investment.
They were of the view 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 gave a detailed briefing on the existing tax framework and its implications. He highlighted 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 the 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.
