ISLAMABAD: The Islamabad Chamber of Commerce and Industry (ICCI) has called upon the government to withdraw the amendment made to Section 68 of the Income Tax Ordinance 2001, meant to change the mechanism of official value of immovable property.
The ICCI’s argument is built on the premise that the amendment would hurt property business and discourage investment in real estate and construction sectors.
In the latest Finance Act, the government inserted a new sub-section 4 in Section 68 of ITO 2001 stating; “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”.
In response, ICCI Acting President Sheikh Abdul Waheed said that real estate sector plays an important role in the development of the country as it contributes over 2% to GDP, fuelling economic growth and creating jobs.
However, the new amendment would have a negative impact on the overall economy as it would discourage local and foreign investment in real estate and construction sectors.
“If the government is serious in improving tax revenue, it should focus on untaxed sectors and explore other avenues for expanding the net.”
Waheed said that more than 40 industries were affiliated with the construction industry and changing the mechanism of official value of property would badly hit construction and its allied industries.
He said such measures would not help the government in achieving its tax revenue targets in view of declining deals in property sector in future.