FBR Excludes The Tax Amnesty Regime For The Construction Sector
ISLAMABAD: The Federal Revenue Board (FBR) has ruled out the possibility of a new tax amnesty plan for contractors to revive the construction industry, stating that the FBR cannot waive the collection of Rs. 200 billion a year.
During the deliberations of the meeting of the Senate Standing Finance Committee, it was proposed to drastically reduce the contractor’s withholding tax from 7.5% to 1% and to establish a general amnesty plan.
It was argued that it would give the construction sector a boost, as the government had already announced the PM Construction Package and asked the IMF to grant it a three-month extension.
The president of the FBR told reporters after the meeting that such an amnesty could not be granted to anyone. He said the FBR was asked to reduce contractor taxes from 7.5% to 1%, but the government could not waive the Rs. 200 billion tax amount.
The FBR also indicated at the Senate panel meeting that property valuation rates in 23 cities could be revised upwards to collect taxes on realized profits of up to 5 million rupees within the stipulated time period of 4 years to moment of disposition from the earth.
FBR chairman Asim Ahmed replied that the valuation rate reported by FBR was 70% of the market value.
Earlier, real estate agent representatives Ahsan Malik and Sardar Tahir had said at the meeting that the government changed the income tax regime to increase the valuation rates reported by the FBR and DC rates starting in July 2021.
They also asked to define “adventurer” and “habitual buyer” of real estate in tax law.
In a related development, the Senate panel rejected FBR’s proposal to impose a 17% GST rate for jewelers on the budget. The Senate panel called for an increase in the Commission’s current budget for higher education to 120 billion rupees for the next fiscal year 2021-22.
Senior HEC officials informed the committee that they requested the 153 billion rupee budget for university salaries, benefits and other administrative expenses, but the finance ministry directed them to streamline spending.
The HEC simplified and filed an amended request for Rs.120 billion, but the government allocated only Rs.66.25 billion, leaving the HEC without sufficient funds in the next fiscal year to pay its obligations in full.
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