Islamabad: The National Assembly (NA) approved significant tax relief measures through the Finance Bill 2020, including the move to scrap proposed luxury tax on villas and farmhouses in the federal capital.
The income tax rates for engineering services have also been reduced, while income from real estate investment trusts has been exempted from income tax. Now engineering services have to pay a 3% income tax only; as opposed to the 8% tax that had originally been proposed.
The government has further extended the tax exemption for profits and gains on the sale of immovable property to a development REIT scheme, with the objective of development and construction of residential buildings up to June 2023. Originally, the extension had been for a year only.
Moreover, the NA has approved the exemption on withholding and advance income tax on cash withdrawals from a rupee bank account for foreign remittances sent into that account during a tax year. This was a part of the government’s plan to increase remittances through banking channels.
Additionally, limited liability partnership companies have been allowed to avail relief measures under Prime Minister Imran Khan’s construction sector relief package.
The excise duty on cement has been reduced to PKR 1.5 per kg of cement, as opposed to the original proposal of PKR 1.75 per kg of cement (which was a reduction from a previous plan for an excise duty of PKR 2 per kg). This is expected to reduce the price of a bag of cement by PKR 50.