ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue Abdul Hafeez Shaikh chaired a meeting with a six-member delegation of the “Association of Builders and Developers of Pakistan” (ABAD).
The delegation was represented by Hassan Bakhshi. Various proposals were presented that could enhance and boost the property business in the country and improve tax collection for the government. The proposals were regarding taxation rates on property, building height restrictions in Karachi and rationalization of property valuation tables and some other policy related exemptions that could help in smooth functioning of the property business and further accelerate the economic activity in the country.
The Adviser to the Prime Minister discussed the proposals in detail with the delegation and after taking the views of the Chairman FBR, assured the members of the delegation that all possible help will be provided to the sector keeping in view the principles of equity, transparency and fair play. The Adviser said that he realizes the importance of the business and wants to engage more with the sector for better facilitation and understanding. He directed the delegation to further refine their proposals for a positive outcome and meet again in the second week of January so that the matters could progress ahead.
ABAD members put their demands before him that the heavy taxes had damaged their businesses. However, the sources said that the rate of federal excise duty on construction material and rates of sales tax would remain the same till the next budget in 2020.
The businessmen gave various proposals as how to enhance and boost the property business and how to improve tax collection for the government. They asked the government to give relaxation on tax rates on property, building height restrictions in big cities like Karachi and asked for rationalization of property valuation.
He asked the builders and constructors to refine their proposals before the next meeting. “Your demands will be considered but just wait for the next budget,” the sources quoted Sheikh as saying during meeting with the builders.
It may be mentioned here that heavy taxes on property and heavy rate on construction material have created a big problem for the builders.
Meanwhile, the sources said that the FBR also rejected fixed tax scheme for developers and builders and deferred the Builders and Developers Special Procedure Rules 2019, however, assurances were given that the field offices of FBR would cooperate with them. Under the facilitation measures for the developers and builders, separate zones/circles have been constituted at the level of field formations.
The first issue raised by the ABAD was the fixed income tax regime. Under proposed scheme, the income computed and tax payable thereon shall be on ‘project-by-project’ basis under the head of ‘Income from Business.’ Tax payable thereon on annual basis (till the year of project completion) shall be computed at the rates mentioned. The said rates would be applicable to compute tax liability for the project for the tax years when the respective project is under construction. The annual tax liability on that basis shall be worked out as specified in the said rules.
The developer and builders requested the FBR for rationalisation of valuation table of immovable properties. The mistakes in valuation table may be rectified at the provincial level by forming a committee consisting ABAD representative, representative of real estate agent and FBR nominee. After five years, 25% discount on valuation of built-up property has been proposed and after 10 years 50% discount on valuation of built-up property. The timing be calculated after sub-lease or sale deed.
To dispose of pending cases and litigation, the ABAD has requested the FBR that the Chief Justice of Pakistan may be requested to form special benches at Supreme Court and High court level to dispose of pending cases of land and construction within 60 days.
Meanwhile, Mohsin Sheikhani, chairman Association of Builders and Developers of Pakistan (ABAD) warned that at least one million peoples’ lives are at stake if illegal construction, which is being patronized by Sindh Building Control Authority (SBCA) for personal gains, is not stopped, immediately by all means.
He said that the collapse of six-story building at Ranchore Lane has proved the fear showed by them; adding that ABAD had been raising voice against illegal construction in Karachi for long but the illegal construction was being carried out in various areas of Karachi under the very nose of SBCA, which was supposed to regulate construction across the Sindh particularly in Karachi.
He said that ABAD through separate letters sent to the Chief Minister Sindh Syed Murad Ali Shah, Chief Secretary Sindh Mumtaz Ali Shah, Sindh Minister for Local Government Nasir Hussain Shah, Advisor to Chief Minister on Law Murtaza Wahab, Chairman National Disaster Management Authority Lt. Gen. Muhammad Afzal and Chairman Sindh Disaster Management Authority Syed Salman Shah expressed fear of any mishap due to illegal construction in Karachi. However, no one paid heed on this warning but now the fear became reality after Ranchore Land incident. Fortunately, no casualty was reported hurt in this incident but the authorities should consider it seriously and take measures on war-footing basis to avert any untoward incident in near future, Sheikhani said.
He said that SBCA was promoting illegal construction for personal gains and termed it as high time for authorities to consider this incident as a wake-up call in order to take action against mafias in SBCA and save human lives, which are at stake due to non-implementation of building bylaws, leaving the Karachiities at the mercy of these unscrupulous elements.
It is pertinent to mention here that ABAD is a national level representative organization of builders and developers, formed in the year 1972 with the aim and objective of unifying and streamlining the construction activities of private sector. ABAD is registered under the Companies Ordinance, 1984 with Registration No. KAR No. 4967 of 1977-78 and licensed under Trade Organizations Ordinance, 2007 and it’s affiliated with the Federation of Pakistan Chamber of commerce and Industry (FPCCI).
The principal aims and objectives of ABAD include:
- Unifying builders and developers for their collective good
- Promoting housing industry in the country
- Providing assistance to the Government in formulating its housing policies and plans
- Co-coordinating between ABAD members, the Government and other agencies
- Dealing with problems faced by its members in the execution of their projects
- Organized research
- Awareness and training program to promote the science and art of building
- Working actively for eradication of unethical business practices from the housing and development field
- Exploring the prospects of large-scale projects in the public sector and then acting as a consortium of ABAD members to secure and execute the projects
Today, ABAD has in its fold more than 1,000 leading construction companies of the country. Most of its members’ offices are equipped with up-to-date systems of designing, cost control, project management and latest civil engineering techniques to minimize the cost of construction. The association operates on democratic lines with election of One Chairman, Senior Vice Chairman, Vice Chairman and Managing Committees and One Chairman from each of its two regions i.e., Southern Region and Northern Region for a full term of year. The Chairman & Sr. Vice Chairman is elected among Full / Ordinary members and the Vice Chairman from Associate Members and One Chairman each from its two respective.
The Elected Office Bearers for the term 2019-20 are Mr. Mohsin Abu Bakar Sheikhani, Chairman; Mr. Muhammad Sohail Warrind, Senior Vice Chairman; Mr. Abdul Rehman, Vice Chairman; Mr. Muhammad Ali Ratadia, Chairman Southern Region; Engr. Akbar Sheikh, Chairman Northern Region (Lahore) and Mr. Moosa Memon, Vice Chairman Hyderabad Sub-Region. As a representative organization of the country’s builders and developers, ABAD has made a valuable contribution in the formulation of National Housing Policy and Sindh building Control Ordinance. It has also played a leading role in securing and increase in the House building Finance Corporation component of housing loans as well as the allocation to HBFC in the Federal Budget.
In the provincial capital of Sindh, ABAD has played a pivotal role in procurement of land for its members and also for the issuance of no objection to them by Karachi Development Authority. Other major achievements of ABAD include increasing the covered area of flats, fixation of the selling price of housing units, inclusion of a provision of escalation, simplification of the procedure for the permission to mortgage and registration of leases, increase in the period of completion and streamlining of documentation procedures regularly. Although there is a pressing requirement for houses in the city yet on account of non-availability of infrastructure and other amenities, some schemes cannot be developed due to scarcity, efforts to remove these bottlenecks are continuing on all possible levels.
As a socially responsible organization in addition to the above core functions ABAD also extends donations and other kinds of support to deserving institutions and welfare organizations. A safe shelter to live in is recognized the world over as a fundamental human right and that is the vision behind ABAD’s efforts and ventures.