KARACHI: Atif Ikram Sheikh, President FPCCI, has echoed the collective demand of the business community that the Section 7E of the Income Tax Ordinance (ITO) 2001 should be abolished for being unproductive and unfair for levying deemed or imaginary income on immovable properties.
Section 7E has produced no significant increase in the tax collection; instead, it has created chaos and discontentment in the otherwise very vibrant real estate sector, he added.
Atif Ikram Sheikh stressed that a Real Estate Regulatory Authority (RERA) should be established in Pakistan like other regional countries as no sector can perform at its optimum and contribute to the national economy in absence of a regulatory authority. However, he added, that this should be done in consultation with the sector’s stakeholders.
The FPCCI chief also highlighted that the Sindh government collected infrastructure cess on import stage at 1.25 percent; which translated into Rs 225 billion per year. Logically, the better part of that cess should be spent on the infrastructural development and maintenance of Karachi; and, if that happens, the real estate of Karachi will be in a much better shape and its market will also pick up, he added.
Saquib Fayyaz Magoon, SVP FPCCI, maintained that real estate can help bring more foreign exchange to the country in the form of remittances. The sector should make it as their top agenda to attract investment from the overseas Pakistanis as it will also help the economy through stabilising rupee-dollar parity and shore up the foreign exchange reserves.
Magoon added that for the sake of policy advocacy in the national interest, any sector that can contribute to inward remittances should be facilitated and encouraged. Instead of investing in the real estate of other countries, the government should enable and welcome overseas Pakistanis to invest back in their home country, he added.
Syed Saquib Shah, Convener of FPCCI’s Central Standing Committee on Real Estate Property and Builders, said the systemic shortcomings and lack of facilitation for the real estate sector can only be addressed through digitalisation of the registration system; in order to bring transparency, fairness and validity in the documentation of the properties. Karachi should also get e-stamp system at the earliest like Punjab has implemented, he added.
Syed Saquib Shah added that taxes are being unfairly imposed; and, the phenomenon is bringing disenchantment and stagnation in the industry. He also emphasised that taxes should be imposed on the property owners; instead of the real estate agents – who simply provide their services to buyers and sellers.
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