The government of Pakistan today passed an ordinance on the Construction Relief Package. In this article and video we have explained that ordinance briefly, and how it will affect the general public. We discussed the following points in the video:
- All construction material except cement and steel to be exempted from withholding tax.
- Fixed tax for builders and developers at the rate of Rs 50 and Rs 100 respectively per sq ft or per sq yard of covered area or land area respectively.
- No sales tax will be charged on services, and fixed tax has been implemented instead.
- The scheme will be valid for projects started before 31st December 2020.
- No amnesty for cash transactions — all cash will have to be deposited in a bank account first, and all transactions must be done via cross-cheque instruments.
- Project deadline will be 30th September 2022 in the case of builders — if only the grey structure is complete by the deadline, the project shall be considered for amnesty.
- If any investor/buyer intends to purchase a flat/house/building, they can avail the amnesty scheme by purchasing the property before 30th September 2022, provided the transaction is done through a banking channel and cross-cheque instruments.
- Capital gain tax waived off for the first project.
- Maximum house size allowed in this amnesty is 1 kanal/500 sq yd. In the case of a flat, maximum covered area should not exceed 4000 sq ft.
- CVT exempted by the federal government.
- Construction sector given status of an INDUSTRY.
Watch the video above for a detailed discussion of the ordinance.