Karachi, May 22, 2025: The Association of Builders and Developers (ABAD) has presented comprehensive proposals to the Government of Pakistan for the federal budget of fiscal year 2025–26, emphasizing tax system reforms, transparency, and promotion of investment.
According to ABAD Chairman Muhammad Hassan Bakshi, the aim of these proposals is not only to support the construction sector but also to stabilize the national economy.
In the budget proposals, Chairman Bakshi called for a long-term 15-year tax policy to restore investor confidence, stating that frequent changes in tax laws create uncertainty in the market, which is harmful for the economy and for investment.
ABAD also demanded the abolition of advance tax under Section 236C and proposed capping the tax under Section 236K to a maximum of 0.5%. It stated that ending the advance tax would make property transfers easier and quicker.
Muhammad Hassan Bakshi said that the tax rate on property purchases under Section 236K is too high. ABAD proposed limiting this rate to 0.5% to reduce the financial burden on buyers and investors and to enhance transparency in transactions.
He further demanded the repeal of Sections 7-E and 7-F. Under Section 7-E, if someone owns property but does not earn income from it, a 1% tax is still imposed, which he termed unfair. For Section 7-F, he suggested replacing the existing complex system with a simple per-area tax model similar to Sections 7C and 7D to ensure ease and transparency.
Regarding capital gains tax, the ABAD chairman noted that the current rules for taxing gains on property sales are unclear. ABAD wants the tax to be based on the holding period of the property, which would create balance and predictability in the market.
The proposals also stated that the Federal Board of Revenue’s (FBR) approval process for issuing refunds is slow and non-transparent. The chairman said that removing this requirement would provide immediate relief to the business community.
Muhammad Hassan Bakshi also pointed out contradictions in valuation tables used to determine property prices, which create problems in transactions. Resolving these inconsistencies, he said, would result in a fair and transparent tax system.
ABAD’s proposals also include a recommendation to reduce the rate of withholding tax. The chairman stated that lowering the withholding tax would not only increase property transactions but also boost government revenue.
He further suggested easing taxes for overseas Pakistanis to encourage remittances. According to Bakshi, when overseas Pakistanis buy property in Pakistan with dollars, they are still subjected to transfer tax, which ABAD considers unjust. Removing this policy would enhance remittances and restore investor confidence among overseas Pakistanis.
The ABAD chairman concluded that these proposals are not just intended to benefit the construction sector, but to put the entire national economy on a stable path. He added that if the government seriously incorporates these suggestions into the budget, it would create more employment opportunities and help address the housing crisis.
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