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Pakistan’s prime minister says investors will be required to disclose sources of income from next year
The Government of Pakistan can only provide “relief” to the construction sector until Dec. 31 due to international obligations that require it to inquire after sources of income from all investors, Prime Minister Imran Khan said on Friday.
“Take full advantage of the incentives before Dec. 31 because afterwards we will not able to provide all exemptions due to international obligations like FATF [Financial Action Task Force],” he said after chairing the first meeting of the National Coordination Committee on Housing, Construction and Development in Islamabad.
The prime minister had announced the tax amnesty scheme for realtors in April. He had said people could invest “black money” in the construction industry without disclosing source of income to boost the country’s economy. This has been seen as a sticking point for compliance with the FATF, which retained Pakistan on its grey list earlier this year but allowed it extra time to improve its compliance due to the coronavirus pandemic.
During his address, the prime minister said the government had decided to provide Rs. 30 billion in subsidy for the Naya Pakistan Housing Program, adding that this would equal the government providing Rs. 300,000 each for the first 100,000 units constructed under it. He said the decision has been taken to reduce the burden on low-income people.
“Anyone borrows from banks to construct their homes will be given a subsidized interest rate. The interest rate of 5 marla houses would be five percent and for 10 marla houses it would be seven percent,” he said, adding that the country’s banks had been directed to set aside five percent of their portfolio for the construction industry. “This comes to about Rs. 330 billion,” he said.
According to the prime minister, the government has also reduced the no-objections certificates required for new constructions, saying there would now be a one-window operation and all authorities would be required to issue approvals within a give timeframe. He said taxes had also been reduced in the provinces.
Khan said the government was focused on developing the construction sector to usher in a new era of employment opportunities for the country. He said the coronavirus pandemic had shrank international economies, and claimed only the construction sector could boost economic activities in Pakistan.
According to the prime minister, the NCC for the construction sector would meet every week under his chairmanship and would be focused on removing obstacles in the way of the construction industry. He said the main objective of the Naya Pakistan Housing Program was to provide housing to the common man. “But we faced many obstacles in our journey,” he said, citing the lack of foreclosure laws. “However, despite all this, we are nearing success in passing a law that will overcome all these hindrances,” he vowed.