Prime Minister Imran Khan on Friday elevated the status of the construction sector to that of the industry while announcing incentives for investors and businessmen as the government tries to mitigate the economic impact of the coronavirus outbreak. PM Imran Khan has always stated that the construction sector is one of those sectors in Pakistan which can help uplift the society. The reason why he has said this on a number of occasions is that a large number of population of the country work on the daily wage system.
The construction sector, from start till the end, provides an amazing opportunity for the people whose main source of income is the daily wage system. The construction sector not only helps provide jobs to a large number of people who are unskilled, but it also provides an opportunity for all the workers to learn while working on the job to become skilled workers. Therefore the PM has always put such a large emphasis on developing the construction sector.
Amidst all the chaos of the corona outbreak and the impact of this pandemic on every sector, PM Imran Khan held an important press conference on 3rd April 2020 to announce several relief packages not only to the industries but also to a large number of people who are currently unemployed due to the coronavirus. The main points that he discussed during the press conference included
The main incentives announced by the pm Imran khan for construction and builders industry premier include:
- All the people investing in the construction sector this year will not be questioned about their source of income.
- The tax rate will be fixed for the construction sector, and constructors will be charged tax per square foot or square yard.
- People carrying out construction in the Naya Pakistan Housing Scheme for the poor will only have to pay 10 percent of the fixed tax.
- Withholding tax will be waived off for all construction sectors except the formal sectors of steel and cement.
- Sales tax will be reduced in coordination with provinces.
- Any family selling their house will not have to pay any capital gains tax.
- A subsidy of Rs30 billion to be given for the Naya Pakistan Housing Scheme.
- Construction sector to be given the status of an industry.
- Construction Industry Development Board to be set up to support the sector.
STATUS OF INDUSTRY TO CONSTRUCTION SECTOR
17. Prime Minister has already approved the status of the industry for the construction sector. However, the implementation of this decision was pended until the next budget on the recommendations of the Ministry of Commerce and FBR. In the present situation, this
decision may be implemented forthwith.
HOUSING / MORTGAGE FINANCING
18. In line with a 7% interest rate offered to Industry for Greenfield Projects, subsidy / lower rates (preferably 6%) be afforded for housing mortgages of one hundred thousand low-cost housing units, construction of which is planned to be initiated in the current
LEGAL ISSUES – CIVIL PROCEDURES ORDINANCE / SPECIAL BENCHES
19. Ministry of Law and Justice is working on a civil procedures ordinance for ICT, which after approval will be shared with Provincial Governments, for implementation in all provinces. The Ministry is also working on the constitution of special benches for hearing civil disputes/cases concerning the real estate/construction sector. Implementation of these measures needs to be expedited.
Construction Sector as a separate industry:
One of the highlight of this press conference, apart from announcing the relief in various taxes and withholding tax for the people associated with the construction sector was that for the first time, the construction sector has been given the status of a separate industry. For this reason, the PM also announced that a Construction Industry Development Board will be set up for the guidance and setting up rules and regulation for the construction Industry. This announcement has been welcomed by a large number of people associated with the construction sector.
Mr Asad Ullah Khan (Chairman Construction Association Pakistan) while talking to media about this statement from the PM said that this is a great step for the construction sector. The declaration of this sector to the status of a separate industry will be a source of great benefit for everyone associated to this industry. He further said that this is the first time in the history of the country since 1947 that someone has announced and allocated such a large budget for this sector. No one before the current government has ever been aware of the importance of this sector. He further said that the only thing that should be done by the government is the separation of the formal construction sector from the construction of infrastructure is needed so that the people associated only with the construction sector can benefit as much as possible.