Prime Minister Imran Khan has announced a massive package for the construction industry in order to increase employment opportunities in the country amid coronavirus outbreak.
The Prime Minister also said that agriculture and construction are two major employing sectors in the country and a lot of people are associated with these.
It has been estimated that the output of the sector has a significant share of 40-60% in gross fixed capital formation.
The construction industry is the backbone of any country’s economy. Other industries are also associated with construction industry including sentries, tiles, and paint. Moreover, engineers, plumbers, laborers, and others would also get job opportunities.
This makes the sector pivotal to economic development as it is crucial for providing shelter, employment, and infrastructure.
Incentives announced for Construction Sector
The main points Prime Minister Imran Khan announced are:
1- Those who invest in the sector will not be asked questions regarding their source of income
2- Fix Tax Regime for the construction sector
3- 90 percent fixed taxes will be waived off if invested in Naya Pakistan Housing Scheme
4- Withholding Taxes waved off from all sectors, except steel and cement
5- Federal Government will discuss with Provinces regarding sales tax reduction. Punjab and KPK have reduced sales tax to 2 percent
6- No Capital Gain Tax will be charged in case of family house sell
7- Rs 30 Billion Subsidy for Naya Pakistan Housing Scheme
8- Construction Industry Development Board to be established for the development of construction Industry
Pakistan construction industry
The construction industry played a major role in Pakistan’s economy. According to the economic survey of Pakistan 2017, the industry grew 9.1 percent in FY2017 and contributed 2.7percent to the country’s gross domestic product (GDP).
The sector has also been an important recipient of foreign direct investment (FDI). According to the provided figures of State Bank of Pakistan in 2017, the construction industry received a net inflow of $35.7 million in August 2017.
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