The construction industry of Pakistan is considered to be one of the biggest sources of economic growth. Therefore, the PTI government is trying to make the Construction and Development industry boom so it can help the economy of Pakistan function smoothly. For this, the government has launched several incentives and relief packages so that investments can be pulled into the sector and economic development can take place.
Imran Khan has introduced an effective relief package worth 8 billion PKR for the Khyber Pakhtunkhwa construction sector. The relief package also includes zero capital value tax. This relief package states that such concessions and incentives are being introduced in the region to promote private investments in the development of the province and create ease of doing business.
The construction industry results in economic growth through employment creation and industrial development. As the unemployment rate is quite high in the country, the PTI government is making arrangements to bring it down and increase developmental growth around the country along with it. Therefore, in addition to tax concessions, transfer fees, and stamp duty charges have also been lowered. Instead of 3% stamp duty, the public now has to pay 2%, half of which is decided to be sent to the local government department so that their monthly expenses and salary expenditures can be covered. According to Dr. Firdous Ashiq Awan, the construction industry has been given 90% tax concessions under the incentive package.
Moreover, while speaking at the inauguration ceremony of the Ravi Riverfront project, PM Imran explained how this is the best opportunity for the country to convert its irregular income to regular income. Therefore, the Federal Cabinet approved a few amendments in Income Tax Ordinance 2001, to provide incentives to the construction sector. These amendments will allow people to invest in the construction sector without disclosing the source of income. All of these incentives also fulfill the long-overdue declaration requirements of the construction sector as a proper industry.
Before coming into power, Imran Khan was viewed as a strong opponent of giving tax amnesties. However, this perception has changed quickly as the PTI government makes efforts to encourage investments in the construction industries in order to improve the country’s economy. To make sure that the end product of this growth in the construction industry directly benefits the general public, huge changes are made in the home loan banking sector under the Naya Pakistan Housing Project NPHP).
While talking about the progress in the NPHP, Mehmood ur Rasheed states how effective measures are taken to provide relief to developers and builders so that this project can move forward exactly according to the Prime Minister Imran Khan’s vision”.
The loan interest rates for 5 Marla to 10 Marla plots in cheaper regions have been lowered to 3, 5, and 7 percent. These mortgage interest rates decreased this much so that the middle class and lower middle class can afford their own houses. As expected, initially banks were facing difficulties in providing loans with such low interests but the incentives introduced by the government for these banks have now made the whole procedure quite feasible for both parties. While mortgage interest rates for 5 – 10 Marla houses are 5 – 7%, conventional home loans for bigger plots have also been subsidized by the government with interest rates of 10% – 12%.
Right now, BTN is working closely with a major bank in Pakistan with regards to the home loans and interest rates and will soon announce further updates and incentives for you to make the right investment decisions.