Islamabad
Prime Minister Imran Khan’s vision to enable the low-income groups in the country to afford their own homes, create a big number of job opportunities and spur economic activity in the construction-related industries.
As per his vision to boost the construction sector and revival of economy, the prime minister had announced the first ever package in the country’s history for the housing sector that will not only fulfill the Pakistan Tehreek-e-Insaf government’s promise of building five million houses but also gear up business activity in more than 40 industries.
The prime minister also announced Rs 30 billion subsidy for the poor people and this subsidy would cater to the first 100,000 houses to be constructed under the Naya Pakistan Housing Programme — which means a subsidy of Rs 300,000 on each house. Those borrowing from the bank to construct their homes would get loans on subsidized interest rate of 5 percent for a 5-marla house and 7 percent for a 10-marla one. The State Bank of Pakistan and all other banks have been asked to set aside 5 percent of their portfolio for the construction industry, which comes to about Rs 330.
To ease it further, the one-window operation, under the Naya Pakistan Housing Authority, has been launched in all the four provinces. A National Coordination Committee on Housing Construction and Development has also been set up to attend to the various obstacles. Taxes have been reduced in the provinces and the complicated procedure of getting NOCs (no-objection certificates) has been eased out.
Besides, in a major incentive for investors, the government has decided not to question the source of investment, made until December 31, 2020.
The government does deserve to be applauded for successfully convincing the international community to allow this amnesty of sorts in view of the country’s ailing economy. The expensive bank loans — coupled with the cumbersome paper work, involving guarantees in particular — have thus far discouraged people in Pakistan to exercise the mortgage option to build or purchase home.
The prime minister unveiled the plan for revival of the construction sector after the maiden meeting of the newly formed National Coordination Committee on Housing and Construction in early July.
There will be 90 percent tax exemption on the construction activity related to the Naya Pakistan Housing Scheme. The general sales tax has been reduced from 15 percent to two percent. While withholding tax has been abolished on the construction material.
