Government Facing Pressure to Reverse Real Estate Taxes
The Government facing pressure to reverse real estate sector taxes and panning to take measures from the upcoming tax periods.
According to officials of FBR, the government planning to propose for non-receipt of 20% capital gain tax (CGT). According to current law sale of a plot after holding 1,095 days instead of the current period of 2,921 days. If a taxpayer sale a moveable property before the eight-year period, FBR will charge CGT up to 20%.
With regard to real estate sector tax reversal, cabinet members visiting the FBR headquarter to take relief. These government officials also tried to convince the FBR not to ask for a source of investment.
Acting Chairman of the FBR, Noushin Javed, has not specified whether the FBR will decide to change the law or to counter the pressure and continue with the current tax laws.
Further, the PTI government had extended the holding period from three years to eight years for open plots to claim tax exemption from 20% CGT. For construction property, the government has increased the period from three years to four years. Due to this government facing pressure to reverse real estate taxes.
During a recent meeting chaired by Adviser for Finance Dr. Abdul Hafeez Shaikh, business segments instructed to look for input for the economic relief package.
The Finance Ministry issued a statement saying, “The business community requested that it should be facilitated in looking after their daily-wage earners over the next two to three months and be provided with assistance to carry on their business with improvement in liquidity position.”
Hafiz Sheikh remarked that in the current crisis, the main agenda of the government is to overcome the virus, help maintain enough cash for the common man, and provide healthcare, cheap food items at affordable prices and timely delivery of goods. Government facing pressure to reverse real estate taxes may not be entertained currently.