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Real estate sector

Real estate sector

The government is apparently working in full gear to infringe upon every sector of the economy these days instead of supporting the business and trade activities to enhance its revenue through taxes and duties. The pathetic part of the situation is that it is trying to fix the scheme of things through bureaucratic manners and spoil the broth. As it is routine in the past, the political leadership finds it very comfortable to issue a presidential decree or an ordinance to implement its immediate decisions without realizing that it will further push the business community into chaos and crisis. What happened in recent days to the real estate sector is a classic example of administrative failure which has created problems not only for the real estate developers but also for the common citizens the most of who want to build a house in a posh locality. There is a whole lot of bureaucracy which can be put to devise a mechanism before announcing a decision concerning general public or the business community, but it never happens in this country.

According to Finance Minister Ishaq Dar, a property valuation agreement has been reached between the government and the stakeholders in the real estate sector and it would be implemented through a presidential ordinance. The government officials and the realtors had been locked in horn for the last one month to reach a conclusion on the change of rules in the real estate sectors. Calling the deal as the landmark, the minister in a press conference claimed that the government revenue will be increased up to 70 billion, almost 10 times more than it used to generate through capital gains tax and withholding tax. This is one part of the situation and the other is that several deals have been either delayed or cancelled during the last one month and the future of the real estate business is also not bright given the current state of affairs. Pakistanis have already emerged as major investors in the real estate business in UAE, Sri Lanka and Malaysia and pressure on the business will add to the already rampant incidents of money laundering and capital flight.

One factor which every successive government ignores is the lacks of patience. Decisions are also made on the whim of the political leadership without realizing the situation on the ground. Many times it happened that a scheme has taken a vigorous start but it ended in smoke in a short period of time. The problem is not in the scheme but in its initiators who fail to grasp things in its implementation state. The government must understand that more is the business, more are the chances of revenue collections and more is the pressure, less is the business and less are the chances of revenue collections.