Tax Relief Expected in Budget 2023-24 for New Constructions

ISLAMABAD: The government has introduced a package of incentives in the budget 2023-24 for developers and people involved in new construction projects. This is in appreciation of the crucial role played by the construction and related industries in the economic development of the country. Builders would receive a 10% or Rs 5 million tax relief on their business income for the following three years under the new regulations.

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Similarly, everyone working on construction projects will get a tax relief of 10%, or Rs.1 million, for the following three years. These tax reliefs will be available for projects starting after July 1, 2023. The government earlier implemented a favorable tax rate for banks making loans in order to further encourage growth in the construction industry, agriculture, and small and medium-sized enterprises (SMEs) in these sectors between 2020 and 2023.

Through this program, banks were able to pay taxes on the revenue they received from loans to these industries at a lower rate of 20% rather than the regular rate of 39%. Despite the fact that the government has proposed extending the program for an extra two years, until 2025, the concessional tax rate was initially scheduled to expire this year.