{"id":63723,"date":"2020-04-06T17:58:49","date_gmt":"2020-04-06T12:58:49","guid":{"rendered":"https:\/\/www.zameen.com\/news\/?p=63723"},"modified":"2020-04-06T18:10:20","modified_gmt":"2020-04-06T13:10:20","slug":"will-prime-minister-construction-package-work","status":"publish","type":"post","link":"https:\/\/www.zameen.com\/news\/will-prime-minister-construction-package-work.html","title":{"rendered":"Will the Prime Minister\u2019s Construction-sector Package Work?"},"content":{"rendered":"\n<p>Even before the coronavirus issues, the government had been gearing to introduce a construction-sector package to incentivise the sector since it had promised to build 5 million homes during its tenure. At the same time, the natural focus on selling and buying plots meant that the construction industry did not attract the same levels of investment as the plots. This had to be changed, some people argued. For real estate activity and investment to fully contribute to the economy, the construction industry needed to be empowered. Hence the government\u2019s plans to introduce the incentive package.<\/p>\n\n\n\n<p>Read: <a href=\"https:\/\/www.zameen.com\/news\/construction-sector-gets-historic-relief-package.html\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Construction sector gets \u2018historic\u2019 relief package; CGT, source of income conditions revoked (opens in a new tab)\">Construction sector gets \u2018historic\u2019 relief package; CGT, source of income conditions revoked<\/a><\/p>\n\n\n\n<p>More recently, the coronavirus situation and its impact on\nthe economy, and, even more adversely, its impact on the lives of the\nvulnerable sections of society, has also likely pushed the government to take\naction. Thus, in his address to the nation on Friday (April 3), Prime Minister (PM)\nImran Khan announced several measures to incentivise the construction sector. &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Prime Minister\u2019s Construction\nIncentive Package<\/strong><\/h2>\n\n\n\n<p>One of the first things that the PM revealed was that the\nconstruction industry will be opened from April 14. This was a critical move,\nespecially in light of the various issues plaguing daily wagers during the\nongoing viral pandemic. These individuals have been affected the most by the\ngovernment-imposed lockdown and needed some relief. <\/p>\n\n\n\n<p>Some of the additional measures for this construction-sector package include:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>No question on sources of investment in\nconstruction sector this year<\/li><li>Fixed tax regime for construction sector to be\napplied on per square foot\/yard of construction, which effectively means lower\ntaxes for real estate<\/li><li>Taxes on construction in the Naya Pakistan\nHousing Programme (NPHP) to be further slashed by 90%<\/li><li>Withholding Tax on materials and services to be\nwaived except for cement and steel industries<\/li><li>Sales Taxes to be reduced in coordination with\nthe provinces<\/li><li>No capital gains tax on the sale of a family\nhome<\/li><li>PKR 30 billion in subsidy for the NPHP<\/li><li>Construction sector to be given \u2018Industry\u2019\nstatus<\/li><li>A \u2018Construction Industry Development Board\u2019 to be\ndeveloped for regulation and promotion of the industry<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Short-term Measures: Providing a\nShort but Quick Boost <\/strong><\/h2>\n\n\n\n<p>Of the various measure announced by PM Khan, most are aimed\nat helping the national economy, developers, builders and daily wagers in the\nshort run. As a result, the construction sector is expected to be opened for\nbusiness in about a week, and a host of taxes have been removed to encourage\ninvestment. Additionally, the cherry on top is that for the remainder of the\nyear, no questions will be asked about sources of income of property investors.\n<\/p>\n\n\n\n<p>Furthermore, not only have the taxes been waived at the\nfederal level, but the provinces have also reduced their taxes. Just recently, the\nPunjab government announced extensive tax relief measures worth PKR 18 billion.\nA significant number of these had been aimed at the construction sector; with\nthe following particularly significant:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Reduction of Capital Value Tax (CVT) and Stamp\nDuty from 6% to 2%<\/li><li>Suspension of service sales tax on construction\nsector <\/li><\/ul>\n\n\n\n<p>Now, the PM has also alluded to these measures in his speech. Effectively, all these steps provide a carte blanche for people to pour their investments in to the construction industry. In fact, investing in the NPHP is even better as it requires only 10% of the requisite tax to be paid. <\/p>\n\n\n\n<p>Read: <a href=\"https:\/\/www.zameen.com\/news\/construction-sector-relief-package-withholding-tax-on-building-materials-abolished-stamp-duty-reduced.html\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Construction sector relief package: Withholding tax on building materials abolished, stamp duty reduced (opens in a new tab)\">Construction sector relief package: Withholding tax on building materials abolished, stamp duty reduced<\/a><\/p>\n\n\n\n<p>These measures are nothing short of an amnesty scheme, which\nallows the investors to regularise their funds and assets without much hassle\nfor a period of several months \u2014 at incredibly low taxes. In turn, this should\nhelp provide a boost to the construction sector. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Industry Status: Regulating and\nPromoting the Construction<\/strong><\/h2>\n\n\n\n<p>The government has coupled the abovementioned measures from construction-sector package with announcements that will truly boost both the economy and the construction sector. The most critical one is the provision of an industry status for the sector. This has been a longstanding demand of all the major builders and developers in the country.<\/p>\n\n\n\n<p>While PM Khan has so far only announced that a Construction\nIndustry Development Board will be established (aimed at promoting the construction\nindustry), a number of other benefits are also expected to be announced. These\ninclude: <\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The construction industry will be able to obtain\nloans at KIBOR rates<\/li><li>The industry will have access and representation\nin chambers of commerce and industries. This will certainly help resolve a lot\nof issues faced by the real estate and construction industries <\/li><li>Industry status will lead to better\ndocumentation that, in turn, results in a more efficient approval system for\nconstruction projects \u2014 boosting businesses in the sector<\/li><li>A more stable and regulated construction sector\nmeans dependable and more trustworthy companies<\/li><\/ul>\n\n\n\n<p>Industry status also allows companies in the sector to create an extensive portfolio. Additionally, they will be able to join the stock exchange, sell shares, and generate funds through this method \u2014 resulting in a significant rise in the number of real estate firms on the stock exchange. <\/p>\n\n\n\n<p>Pakistan\u2019s real estate sector and, by extension, the construction industry has been at a bit of a standstill for quite some time. The taxes had been rising and there was no relief in sight to counter-balance this trend; but now, compensation has finally been provided. Not only will this construction-sector package provide a short-term boost to the construction sector and its numerous associated industries (and perhaps even the entire economy), it will also help in extensively stabilising, regulating, and promoting the construction sector in the long run.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Even before the coronavirus issues, the government had been gearing to introduce a construction-sector package to incentivise the sector since it had promised to build 5 million homes during its tenure. At the same time, the natural focus on selling and buying plots meant that the construction industry did not attract the same levels of investment as the plots. This had to be changed, some people argued. For real estate activity and investment to fully contribute to the economy, the construction industry needed to be empowered. Hence the government\u2019s plans to introduce the incentive package. Read: Construction sector gets \u2018historic\u2019 relief package; CGT, source of income conditions revoked More recently, the coronavirus situation and its impact on the economy, and, even more adversely, its impact on the lives of the vulnerable sections of society, has also likely pushed the government to take action. Thus, in his address to the nation on Friday (April 3), Prime Minister (PM) Imran Khan announced several measures to incentivise the construction sector. &nbsp; Prime Minister\u2019s Construction Incentive Package One of the first things that the PM revealed was that the construction industry will be opened from April 14. This was a critical move, especially in&hellip;<\/p>\n","protected":false},"author":57,"featured_media":63726,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15017,15019],"tags":[25449,25451,25452,23344,25453,25454,25455,15023,25445],"persona":[],"class_list":{"0":"post-63723","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-notices-announcements","8":"category-research-analysis","9":"tag-construcion-sector-given-industry-status","10":"tag-construction-sector-in-pakistan","11":"tag-construction-sector-package","12":"tag-coronavirus","13":"tag-incentives-by-the-government-during-covid-19","14":"tag-incentives-for-construction-industry-in-pakistan","15":"tag-relief-package-for-construction-industry","16":"tag-slider","17":"tag-will-the-prime-ministers-construction-sector-package-work","18":"cat-15017-id","19":"cat-15019-id"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Will Prime Minister construction pacakage work? - Zameen News<\/title>\n<meta name=\"description\" content=\"Even before the coronavirus issues, the government had been gearing to introduce a construction-sector package to incentivise the sector since it had\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.zameen.com\/news\/will-prime-minister-construction-package-work.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Will Prime Minister construction pacakage work? - Zameen News\" \/>\n<meta property=\"og:description\" content=\"Even before the coronavirus issues, the government had been gearing to introduce a construction-sector package to incentivise the sector since it had\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.zameen.com\/news\/will-prime-minister-construction-package-work.html\" \/>\n<meta property=\"og:site_name\" content=\"Pakistan Real Estate News &amp; 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