ISLAMABAD - The Islamabad Chamber of Commerce and Industry (ICCI) has called upon the government to revoke the amendment made to Section 68 of the Income Tax Ordinance 2001 to change the mechanism of official value of immovable property, saying it will hurt the property business in the country and discourage investment in real estate and construction sectors.

Sub-section 4 inserted in Section 68 of ITO 2001 states: “Notwithstanding anything contained in sub-section (1) and (3) the fair market value of immovable property shall be determined on the basis of valuation made by a panel of approved valuers of the State Bank of Pakistan”.

ICCI Acting President Sheikh Abdul Waheed said that real estate sector played an important role in the development of the country, since it contributed over 2 percent to GDP, fuelled economic growth and created jobs.

“However, the new amendment to Sec-68 of ITO 2001 would have a negative impact on the overall economy, as it would discourage local and foreign investment in real estate and construction sectors,” he said, adding, “I am afraid the new move may eventually curtail the flow of foreign remittances into the country as well.”

He said if the government was serious in increasing tax revenues, it should focus on untaxed sectors and explore other avenues for expanding the tax net. “More than 40 industries are affiliated with the construction sector, and changing the mechanism of official value of property would badly hit construction and its allied sectors,” he apprehended.

He opined such measures would not help the government achieve its tax generation targets in future in view of declining deals in property sector.

He said the new law was also against the spirit of the National Housing Policy 2001.

He said the government instead of going ahead with the new amendment should constitute a new committee, comprising representatives of ICCI, Islamabad Real Estate Agents and local administration, to revise the official value of immovable property in order to save the real estate and construction sectors from further damages.