ISLAMABAD-After the announcement of special incentives’ package for the construction sector by the Prime Minister Imran khan in April 2019, the Directorate of Industries and Labour, Islamabad has witnessed 90 per cent increase in the number of construction firm registration and its allied services. The Prime Minister had announced a relief package for the construction sector, aimed at stimulating economic activity and generating employment to overcome the economic impact of COVID-19 in Pakistan. Of the total 241 registered construction firms since 2019 over 100 were registered during the last six months, was a testimony of the business community’s trust and confidence in the government’s policies, particularly in construction incentive package, and that it will help spur economic activity in the country, said Director Industries and Labour, Islamabad, Waqar Anwar in an interview with APP.

The department also registered over 175 firms in allied services of construction sector, include, engineering consultancy, interior designing, general order suppliers, pipes and fitting, appliances and electrical services, he added. Under instructions of the Chief Commissioner Islamabad Amer ali Ahmed, the Directorate has provided utmost facilitation to all those interested in registration of firms under Partnership Act, 1932 and that firm registration process has not only been simplified but time period for issuance of certificate has also been curtailed to two days, the Director said. He said firms are registered under Partnership Act, 1932 by the Industries Department of the Islamabad Capital Territory Administration (ICTA) for running small to medium businesses in the ICT. “Builders and developers want to make the best use of the incentive package by starting their projects before end-2020 and finishing the same before 2022,” Anwar remarked.

To a query, he said being the second largest industry in Pakistan with unprecedented potential, through the construction industry the government aims to develop the sector, fill the gap and bring it at par with the existing market demands and generate employment. Highlighting the incentives package, Anwar said, the federal cabinet approved an amnesty scheme under the package, allowing the investors to invest in the sector without disclosing their source of income or proving the money-trail. Under the package, provisions of Section 111 have been exempted. This makes it easier to construct and sell a property for speculative/investment purposes. However, he said the terms of exemption will only include projects that are commenced by December 31, 2020, and completed till September 30, 2022. A project will only be considered to be complete if the grey structure has been completed till September 30, 2022, and the developer has completed landscaping by that time and constructed 50 per cent sub-grade level roads on the project site. This is to ensure the timely completion of projects and increase economic activity within the time frame, he maintained. He said the government will also waive off the withholding tax on materials in the construction sector except for cement and steel. 

By amending the Finance Act, 1989, a reduced rate of advance tax from 10 per cent to 5 per cent was introduced for sales of immovable property through auction. Sales tax has been reduced in coordination with the provinces, with Punjab and Khyber-Pakhtunkhwa agreeing to reduce it to 2 per cent. Anwar said, the cabinet also granted a one-time exemption on Capital Gains Tax for a residential house, measuring 500 square yards or less and/or in case of a flat of 4,000 square feet or less. Predominantly termed as an agricultural economy, the construction sector is the second largest sector, contributing about 12-13 per cent to the economy. It is a sector that impacts millions of lives all across the nation. By bringing together several governmental and non-governmental departments, actors in the public and private sector that decide on how to impact not only the sector itself but also over 70 allied industries. This, in turn, kick-starts action for the entire value chain including various components like strategizing transport systems for delivery and accessibility, the workers including daily wage labourers, plumbers, technicians, builders, management of builders and the availability and provision of essential construction material i.e. cement, sand, steel, paint, hardware etc.