LAHORE -  The amnesty scheme for real estate sector has been termed as an anti-industry step and detrimental to the country’s economy, however property dealers have called it very balanced and attractive package, giving confidence to the property business stakeholders, who were very depressed after the last budget.

The Constructors Association of Pakistan (CAP) Chairman Engineer Sikandar Hayat Khattack has urged the government to discourage any such decision as the tax evaders would get encouragement and would continue their criminal activities if a legal cover was given to black money holders.

He said that the tax evaders were the main beneficiaries of this proposed amnesty scheme, which proposed to clear billions of rupees black money by paying nominal tax. “In the past, similar tax amnesty schemes have also been abused by tax evaders to launder their untaxed money through state patronage and under all such amnesty schemes so far, government has failed to collect even a fraction of the black money,” he added.

He suggested the government to impose restriction of getting NTN on beneficiaries of this new amnesty scheme. “The black money holders who want to whiten their money should also be forced to get registration to pay income tax in future, when they would build plazas with their new white money by paying just few percent tax.”

On the other hand, the property dealers said that due to the new scheme, confidence of the investors will be restored. “Before approval of this bill, local investors were investing their money in foreign countries and overseas Pakistanis were also least interested to invest here. But now these both groups will be encouraged to invest in real estate sector in Pakistan,” they unanimously said.

Malik Farid, a property agent, said the businessmen had pulled out their money from banks after introduction of withholding tax on filers and non-filers on tax returns. They basically parked their money abroad which was expected to come back after the announcement of amnesty.

Farid said that after the introduction of new valuation rates, the uncertainty has now starting to end. He said that Pakistanis bought property worth Rs85 billion in Dubai during the first half of this year, which may return now, he hoped.

The DHA Real Estate Agents Association President Rafique Hasrat facilitated the government for approval of Amended Bill of Income Tax Ordinance 2001 by the National Assembly, terming it a step in the right direction to increase confidence of national and international real estate sector investors.

“The effect of amnesty will start giving results in January. Amnesty not given to property holders rather it is for new buyers, also giving a boost to the remittances which had been decreasing particularly after the announcement of new taxes in property sector.” Rafique said the new amended bill will benefit real estate industry and its affiliated sectors at large. Construction industry will also experience a boom, he added.

The industry experts said that immediate effect of amnesty will be the rise in property transactions. The stalled activates in real estate sector will resume again. They claimed that it is wrong that government is helping the people with black money. Rather the government will achieve its major goals, which were not achieved in budget 2016-2017. Rafique said that new valuation done by Federal Board of Revenue (FBR) is not at par with market value in several areas of Lahore which should be revised.

Whereas, FPCCI president Rauf Alam said that real estate is a dynamic sector and has the ability to attract huge foreign investment but because of adverse policies and heavy taxation, it was facing catastrophe-like circumstances and struggling for survival. He said that transactions in real estate sectors have been fallen by around 90 percent. If the government withdraws taxes from real estate sector, it would enhance government’s revenue as number of transactions would be increased.

Economists said that it is the tenth amnesty scheme in the history of the country and the third of the Pakistan Muslim League-N government in last three years. The government’s last tax amnesty scheme to traders miserably failed, as it could bring in only 9,090 traders in the net against the claim of over one million.

Senate Standing Committe Chairman Qaiser Ahmed Sheikh stated that the idea is to streamline the whole sector and eradicate the anomalies in real estate transactions.