KARACHI: The construction industry has raised serious concerns over proposed financial restrictions for non-tax filers in the federal budget 2025-26, warning that the measures could accelerate capital flight from this sector already experiencing negative growth for the last three consecutive years.
Hassan Bakshi, Chairman, Association of Builders and Developers of Pakistan (ABAD), expressed these concerns while speaking to media on Wednesday, highlighting the potential adverse impact on the construction sector’s recovery prospects.
He said the primary concern is about the proposed restrictions that would bar non-filers from purchasing immovable property in Pakistan. He argued that such measures would create a negative impact on the construction sector that is already struggling to regain momentum.
According to Bakshi, ABAD has already engaged with Prime Minister Mian Muhammad Shehbaz Sharif regarding these restrictions. “We have discussed it with the prime minister, expressing our concerns on the said restriction.”
He believed that the proposal was neither included under the IMF recommendations nor with the PM’s consent, who has assured ABAD not to implement it. “ABAD is planning a delegation visit to Islamabad next week to further discuss the matter with the high-ups,” he informed.
Rather than imposing pre-emptive restrictions, Bakshi suggested, allowing non-filers to purchase immovable properties, which would provide the government with comprehensive financial details of these individuals. This information could then be utilised to bring them into the tax net, which he believed would be a more inclusive approach for broadening of tax base.
Chairman ABAD warned that the enforcement of these restrictions could have far-reaching consequences beyond domestic markets. “If the said restrictions were enforced, the construction sector, which is already facing negative growth for the last three years, won’t see any healthy business activities in the coming financial year.”
Bakshi said that the measures would expedite the flight of capital, especially to Middle Eastern countries, which are now offering partnerships to our developers with their expertise, not investments.
He said that withholding tax on property purchases has been proposed to be reduced for the buyers, but the tax burden on sellers has been recommended to increase proportionally, adding that this approach would not create any positive impact, as it merely shifts the tax burden rather than reducing it.
Despite the concerns, the ABAD chairman acknowledged several positive proposals in this budget, including the introduction of tax credits to encourage mortgage financing and the reduction in stamp duty for Islamabad.
Copyright media, 2025
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