Business
ADB calls for tax reforms in the real estate sector
Tax incentives on property development have deprived the government of revenue
Islamabad: The Asian Development Bank (ADB) has demanded tax reforms and the abolition of tax exemptions in the real estate sector.
According to ADB, the tax exemption on open plots should end after six years and tax on property development should be imposed. Due to tax exemption on property development, investment in manufacturing and agribusinesses is decreasing. Lack of investment in manufacturing and agri-businesses is a hindrance to growth and productivity.
The Asian Development Bank stated that a standard tax should be levied on the sale and investment of immovable property. The tax incentives on property development have deprived the government of revenue. Tax exemptions have led to local investment in the real estate sector.
According to ADB, measures for energy reforms, and water supply reforms have been demanded in the Pakistan National Urban Assessment Report. The measures for better use of energy in water supply, transport systems, and building design are indispensable.
The report said that due to the increasing population in Pakistan, alternative energy sources will also have to be expanded. Water resources management plan will provide clean water for drinking and there will be penalties for wasting water. Urban development requires reforms in solid waste management and transport system.