Reforms for construction sector

Fulfilling a major demand of the construction industry, Prime Minister Imran Khan Thursday granted one-year extension in date for the fixed tax regime, till Dec 31, 2021. He made this decision to boost economic activity and create employment opportunities.

PM made the announcement after chairing a review meeting on progress in the construction sector. In addition, he termed the extension a New Year gift for the construction sector. The PM believed that the sector was the key to offsetting the impact of Coronavirus pandemic on the national economy.

Announcing the package, the PM said that small houses would be subsidized. Moreover, the bank would not charge more than 5 and 7 percent interest on 5- and 10-marla houses for the next five years. He said that the exemption period had also been extended till June 30, 2021 for those who invest in the construction sector to show the sources of income. Whereas, the projects that Government had to complete by Sept 30, 2023 had also been extended by one year.


“We have extended this till March 31, 2023, with the exception that the buyer had to declare his income at the time of purchase of the property. When we announced the package for the construction industry, they could not get the most out of it because of the coronavirus, so they demanded an extension,” he said.

“I am much pleased to announce that the Federal Board of Revenue (FBR) has approved PKR 186 billion projects under the concessions we have given in the construction sector.

He said that the process of approval of Rs136 billion projects was under way in Punjab. “We believe that we will generate the economic activity from Punjab, which will be about PKR 1500 billion. Simultaneously, that will create 2.5 lakh jobs in Punjab,” he noted.

The prime minister pointed out that they have started similar projects in other places including Khyber-Pakhtunkhwa, Balochistan and Karachi. 

While “our biggest achievement in terms of low-value houses for the salaried class was that we passed the foreclosure law. We passed this law very late which delayed our plans. “But now it has been approved and passed by the court and thanks to this, for the first time in Pakistan, banks are financing even in low-value houses.”

He said that banks had promised the government and the State Bank of Pakistan (SBP) that they have set aside PKR 378 billion for construction activities by Dec 2021.

The PM added that the government had decided to give a subsidy of Rs30 billion to low-cost houses. For instance, out of the first one lakh houses which we have to built, we will grant Rs3 lakh per house. And the money they used to spend on rent would go towards paying house instalments. However,  the initial 300,000 houses would get a subsidy of Rs3 lakh per house.


The PM emphasized that the Automated Approval Regime (AAR) was a great achievement. He commended the Capital Development Authority (CDA), Lahore Development Authority (LDA). He further said they had done a lot of work on automated system, which had the advantage that the work which used to take months and years would be done now in a few weeks due to automated method.


He said that we need to formulate new master plans of cities. Consequently, to stop their spread as agricultural lands were declining. As a result we are facing a big problem of food security in the times to come. The PM said that the new master plans of our cities are being developed. Moreover, Government is digitalizing land records, as the issues are full of land dispute cases. Therefore, by August 2021, the land records of three major cities – Karachi, Lahore and Islamabad  would be digitalized. Thus it would end the land issues.

Imran Khan said, “It is important to compile digital data of all government lands because our capital is dead. Government agencies are in deficit and they are paying debts and interest. However, they have billions of rupees in land. And we can not use them because the land records are not good.”


The PM said he was happy that cement industry made record cement sales. The sale of cement means that the construction process in Pakistan had accelerated. He continued that like in the rest of the world, Pakistan also suffered a lot from coronavirus. Especially in the services sector, but with the opening up of the construction industry, Pakistan was able to overcome the crisis in a better way.

He said, “This is the first government since the 1960s that has decided to develop its industry. Which will open employment and economic opportunities in our country. Hence, we will be able to repay our loans while providing employment to our young population.

“We will fully support the construction industry and that is why we have extended this exemption to them. While we are also removing the obstacles in the construction industry”.


Meanwhile, Prime Minister Imran Khan approved an online agro-dashboard. National Security Division has developed it. Which will monitor food prices and availability at the national, provincial and district levels.

Dashboards will not only play a key role in avoiding any crisis with the help of certified decimals. But will also be very effective in preventing hoarding and profiteering. He gave the approval while starting a series of weekly review meetings of the priority sectors.

In addition, he emphasized that we must take steps to increase exports and find local alternatives to imports. Therefore, to increase the current account surplus and not put pressure on foreign exchange reserves.

In this regard, from now on, PM will chair weekly review meetings. In which he would oversee the immediate resolution of issues in these areas.

The officials will brief the PM separately on the progress of these meetings with special focus on each sector. Mehtab Haider adds: Meanwhile, Federal Board of Revenue (FBR) has issued a clarification regarding extension in Prime Minister’s Construction Package.

The FBR has stated that they have extended last date for seeking immunity by builders and developers from probing their source of funds. Moreover, they avail fixed tax regime from 31st of December 2020 to 30th of June 2021. Similarly, FBR has extended the the last date for builders and developers who want to avail fixed tax regime from 31st of December 2020 to 31st of December 2021.

 FBR has further clarified that they have extended the project date for completion of projects from 30th of September 2022 to 30th of September 2023.However, last date for buyers of housing units and plots has been extended from 30th of September 2022 to 30th of March 2023.

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