ISLAMABAD: Amid increasing threat of deadly coronavirus that has so far claimed 40 lives across the country, Prime Minister Imran Khan on Friday announced a set of incentives for those investing in the construction sector and vowed to open allied industries to strike a balance between economic activities and efforts to contain the pandemic.
Giving the status of an “industry” to the construction sector, PM Khan unveiled the relief package that would be implemented from April 14 and under which those investing this year would not be asked about their sources of income.
He also announced that a fixed tax would be levied on construction activities under the package while 90 per cent taxes would be waived on the construction of houses under Naya Pakistan Housing Programme. Also, Capital Gain Tax on sale and purchase of property was withdrawn.
The prime minister said all construction material except steel and cement would be exempt from withholding tax.
PM says investors will not be asked about their sources of income
The incentives for the construction industry and allied industries were unveiled at a press briefing after the National Coordination Committee (NCC) meeting, which was chaired by the premier. Chief of Army Staff Gen Qamar Javed Bajwa also attended the meeting.
Mr Khan said: “We discussed the package [for construction] in NCC meeting today with all provinces and the governments of AJ&K and Gilgit-Baltistan and all decided to curtail taxes on construction industry. Punjab and Khyber Pakhtunkhwa have already consolidated their taxes on construction industry to 2pc only.
“We are giving the status of an industry to construction sector and constituting Construction Industry Development Board for the promotion of construction industry,” the prime minister said, adding that a subsidy of Rs30 billion was also being given to those who would get their houses built under the Naya Pakistan Housing Programme.
Responding to a question, PM Khan said not only the construction industry but allied industries too had to be opened to generate economic activity so that informal labour and daily wage earners could get income to feed their families amid the coronavirus crisis.
The PM said nobody knew how long the Covid-19 crisis would persist. It was for this reason that besides providing monetary assistance, the government had to open some businesses and industries so that people could get their own income. “But we have to keep a balance between the continuing lockdown and avoiding unemployment,” he added.
Unlike the US and western countries, he said, Pakistan, India and some African countries had different problems due to their limited resources. “We have corona on the one hand and poverty on the other,” he said, adding that one could not lock up 220 million people for long.
“If the lockdown continues for a long time, people would become desperate and come out on the streets and that will cause spike in infection rate and worsen economic situation. How can we tell a starving person to stay indoors?” he added.
So far the lockdown was successful in the Chinese city of Wuhan, because the Chinese government made arrangements to ensure food delivery at people’s doorstep, he said. “We have established Corona Relief Tiger force to provide food to the people’s doorsteps,” he said, adding that over four million youth had registered themselves for the force.
He rejected the perception that Pakistanis had some sort of immunity against the coronavirus. He said it was quite dangerous, as no one could say how fast this virus would spread.
He said Rs200 billion had been allocated to provide relief to daily wage earners while gas, water or power supply would not be disconnected for the next three months if the people could not afford to pay bills.
Later, chairman of the Association of Builders and Developers of Pakistan Mohsin Sheikhani and Federation of Realtors Pakistan President Sardar Tahir welcomed the package.
Mr Tahir, however, demanded that the sources of income of buyers, too, should not be asked, as otherwise no one would purchase property. He expressed the hope that the condition of issuance of NOC by government departments in 45 days must be implemented for construction projects.
Published in Dawn, April 4th, 2020