KARACHI: Association of Builders and Developers of Pakistan (ABAD) chairman Asif Sumsum has announced to move the court against “heavy and unreasonable” taxes imposed on the construction industry and real estate in the federal budget 2024-25, terming it “very destructive” for the sector.

In a statement, he said that after this budget, it has not only become difficult but impossible for the common man to build their house.

“Can one say that a house built on 60, 80, and 120 yards is a luxury?” he questioned, adding that high taxes have stopped investment in the construction sector. It would “affect local industries” related to the construction sector and render millions jobless.

“If the tax burden is not reduced, the investments made by overseas Pakistanis in this sector will be transferred to other countries, reducing the foreign exchange inflow,” he said.

He said the ABAD had submitted its proposals and requested the government to improve the economy. Still, instead of relieving the construction industry, they imposed more taxes, which would prove to be “the last nail in the coffin”.

The ABAD chief said that it is completely unfair to levy up to 60pc tax and 3pc Federal Excise Duty (FED) in the budget, while already 6-7pc FED on the sale and purchase of property is in place.

He said that after the implementation of tax on immovable properties in 2022, remittances from overseas Pakistanis have drastically reduced.

Due to heavy taxes on the construction sector, it has become impossible for Pakistani citizens to build their own houses amid an already looming shortage of more than 10 million houses.

“The government’s basic responsibility is to provide housing facilities to its citizens. If the government cannot fulfill this responsibility, it should protect the construction sector, he added.” He said increasing taxes and duties would increase the number of informal settlements in Karachi.

Published in Dawn, July 3rd, 2024