In Islamabad, Pakistan’s Prime Minister Imran Khan announced an exclusive relief package for the construction sector – to balance the locked-down and economic activity.
According to Khan, “after agriculture, construction is the next staple sector that employs the second largest number of workforce, and it’s one of the most important drivers of Pakistan’s economy.”
The package includes a number of incentives for the construction sector for the sole purpose of employing the labor groups and saving them from hunger and the related difficult circumstances in the wake of the coronavirus outbreak.
Before discussing the relief package, let’s analyze what it holds…
Is the Package REALLY a Relief?
Yes, as far as construction stakeholders are concerned, that includes project manager, project team, technical services providers, material and equipment suppliers, internal/external consultants, site personnel, contractors and subcontractors, public utility providers, licensing and inspecting organizations, professional bodies, and personal interest groups, all will be at advantage with the PM’s construction package.
But hold on… who is going to select these stakeholders?
Obviously the government employees. So what would be their criteria? Will the selection process be centered around individual skills or their association with those govt employees and/or with PTI?
If the same rule of favoritism will be practiced, then this package would be useless for citizens having requested skills – then those who are planning to work for the Naya Pakistan Scheme have to either buy the job or simply be refused, if they have no connection in the government sector.
The same is the case with laborers, for whom this package is, as per our PM, furnished; the criteria of selecting the labor force will decide how far the package actually relieved the desired labor force.
Now comes to those with black money… yes, this package actually is more yet directly helpful for money-hoarders and/or money launderers than anyone. Those who saved from the last wave of property tax and restrictive measures or have invested abroad, now have the time and a golden opportunity to invest their easy-earned dollars in the construction industry of Pakistan, as nobody is going to ask them the source of their income.
So, this package is directly in favor of those who have unnamed properties and have multi-digit offshore accounts for the sole purpose of tax evasion; and yes, the tax has also now been fixed, so, grab the opportunity now!
Let me share all the incentives offered to Construction Sector
PM’s Package for Construction Industry
- Your Source of Income won’t be asked if invested in the Construction sector – only for this fiscal year.
- The construction sector tax has been fixed – if the investment is for the Naya Pakistan Housing Scheme, 90% of the tax will be exempted.
- Only cement and steel producers will pay the withholding tax, while the rest of materials and services of the construction sector have been abolished from the tax.
- No capital gains tax will be collected from “any family that wants to sell its house.”
- PM announced a “Rs30 billion subsidy for the Naya Pakistan Housing Scheme”
- The Construction sector has given industry status and announced the formulation of The Construction Industry Development Board, to promote the construction industry.
According to Khan, “Four million people have registered for the funds, we will start issuing cheques in next three to four days.”
The whole package is of Rs. 1200; 1.5 Billion is for supporting 12 million families, Rs. 200 billion has been allocated for those who have lost their jobs during the coronavirus crisis, Rs. 70 billion is allocated to support the subsidized amount of petrol and diesel, Rs. 280 billion is for buying 82 million tons of wheat, 100 billion is also allocated for emergency purposes, and taxes amount 100 billion refunded.
How far this construction package will bring harmony to laborers’ lives will decide by the time, but for those with black/illegal money, the package is the best opportunity.