Since the introduction of the construction incentive package by the prime minister more than 1070 projects have been registered with Federal Board of Revenue (FBR) having investment worth of Rs383 billion.
According to the latest data released by the FBR the construction incentive package has attracted huge investments of Rs383 billion. The FBR had uploaded the names and complete addresses of the names of individuals, companies, and firms registered under Section 100D of the Income Tax Ordinance, 2001, who availed the PM’s incentive package.
The package was promulgated through Tax Laws (Amendment) Ordinance, 2020 whereby a new section 100D and Eleventh Schedule were inserted in Income Tax Ordinance 2001.
The package is applicable to both the builders and developers of the land, and covers both the new and existing construction and development projects. Builders and developers can avail the tax benefits of the package in respect of residential as well as commercial buildings. This can be availed by individuals, association of persons and companies, irrespective of the entity status.
The first benefit of this scheme is that it provides fixed tax rates that are per square foot for builders and per square yard for developers. Furthermore the tax, so calculated is further reduced by 90 percent in cases of low-cost housing projects.
The government’s package for construction also provides for many concessions from withholding taxes. In order to mobilise investment, a complete immunity from probe regarding the sources of investment has been provided to the builders/developers and to the buyers of the properties of such projects subject to fulfilment of certain conditions.
To avail this package every builder and developer is required to register on computer-based IRIS Software of the FBR on or before 31.12.2020, and the projects are required to be completed before 30.09.2022. The requirements for registration include provision of bank account, ownership documents and approved plan. The FBR System also provides for temporary registration pending completion of approvals.
