The President of Pakistan has promulgated amendments in the tax laws to accelerate investment in the construction sector. The Amendment Ordinance grants status of “industry” to the construction sector and offers several time-bound tax relief measures for builders and developers that complete their projects by September 2022. The Amendment Ordinance also grants immunity from audit regarding source of investment, subject to fulfillment of certain conditions. The Amendment Ordinance is silent on any exemptions from sales tax or excise tax (duty) on construction material, and there is also no relief from capital gains tax on commercial property or open plots.
Meanwhile in the Province of Punjab with significant investment in the hospitality industry, the Government of Punjab granted zero percent rate of sales and service tax without input tax adjustment, etc. to Hotels, Motels, Guest Houses, Marriage Halls, Catering Services and Clubs through amendment made in the Second Schedule of the Punjab Sales Tax and Services Act, 2012.
Punjab Government also issued notification against any forceful eviction of tenants by landlords during period of lockdown. The Government of Sindh has also circulated an Ordinance proposing similar amendments to the Rent law including providing reduction of payment in rent by tenants to landlord subject to a specified rental slabs.