ADB calls for abolition of tax exemptions for real estate sector
Business
The ABD has issued report highlighting mismanagement in various sectors
ISLAMABAD (Dunya News) – The Asian Development Bank (ADB) has urged the government of Pakistan to abolish tax exemptions being given to the real estate sector “to enhance revenue collection.”
The bank has issued “Pakistan National Urban Assessment” report highlighting mismanagement in various sectors.
According to the report, the ADB suggested to “end” tax exemption on open plots after six years and levy property development tax. The bank said due to tax exemption on property development, investment in manufacturing and agriculture sector declines.
A lack of investment in manufacturing and agriculture hampers growth and productivity.
The bank says that a standard tax should be levied on the sale and investment on immovable property. Tax concession on property development deprives the government of revenue, it added.
The ADB report says due to tax exemption, investors opt for the real estate sector.
The report calls for measures for energy and water supply reforms. Steps should be taken for better use of energy in water supply and transport system.
The ADB said that due to the population explosion in Pakistan, alternative energy sources should have been tapped.
It stressed on water resources management plan to provide clean drinking to the people and suggested penalties for wasting water.
The report mentions that urban development requires reforms in solid waste management and transport systems.
