ISLAMABAD: The Board of Investment (BOI) organised a seminar on construction and housing in Dubai on Tuesday to inform investors about the potential of housing sector in Pakistan.
The investors participating in the seminar were informed that Pakistan’s annual demand for housing had been estimated to be 700,000 but only less than half of the demand was currently being met.
Speaking to investors, BOI Secretary Fareena Mazhar encouraged them to explore the housing sector which offered tremendous tax-based rebates under tax laws amendment ordinance 2020 and incentives and facilitations in project approvals through one-window operation under the Naya Pakistan Housing and Development Authority (NAPHDA).
Elaborating on tax incentives, she said that eligible developers and builders would be exempt from withholding taxes on purchase of building materials and any tax payable on the income, profits and gains of projects of low-cost housing under NAPHDA or Ehsaas programme would be reduced by 90 per cent.
She said the Income Tax Ordinance had been amended to declare the construction sector as an industrial undertaking to make it eligible for benefits available to other industries.
Ms Fareena underscored that in order to promote housing and construction of buildings (residential and non- residential) in Pakistan, the State Bank of Pakistan had decided to advise mandatory targets to the banks.
Accordingly, each bank will ensure that the financing for housing and construction of buildings shall be at least five per cent of their domestic private sector credit by December, she added.
The BOI secretary apprised investors of appreciation by international think-tanks and research groups of Pakistan’s impressive economic performance.
She said that this had been accomplished against the backdrop of a well-designed structural adjustment programme that was reforming all sectors of the economy and making substantial room for private sector initiatives.
Underscoring the strategic location of the country, she said that Pakistan was a promising regional hub and an important destination for trade and investment.
Published in Dawn, November 3rd, 2021
