Federal Cabinet on Friday endorsed a law for the development business that will give unique tax cuts to manufacturers and land designers as business endures because of the spread of the novel coronvirus in Pakistan and over the world.
The tax reductions will be relevant when the law is authoritatively informed, sources revealed to News. Under the law, those putting resources into land advancement plans won’t be gotten some information about the sources or root of their ventures into the plans.
Manufacturers and engineers who wish to exploit this plan should store their speculations into ledgers by December 31.
These manufacturers and engineers will at that point will undoubtedly pull back cash from these records for the speculations.
Important Points of New Law are given below:
- Applicable to new projects starting before 31st of December, 2020 and existing incomplete projects who opt for taxation under this scheme.
- Both new and existing projects would have to get registered with FBR by filing a prescribed form on IRIS web portal.
- Existing projects would self-declare the percentage of completion and shall pay fixed tax for the remaining project under the new fixed tax scheme.
- Exemption of tax on dividends paid to shareholders by builders and developers opting for taxation under this scheme.
- Tax levied on per square foot / per square yard basis.
- No withholding taxes on materials except for cement and steel.
- No withholding taxes on services except those rendered by companies.
- Builders and developers can take credit of income / profit from project up to ten times of tax paid.
- For low cost housing projects, tax further reduced by 90%.