Reduce Withholding Tax, Abolish FED for Revival of Construction Industry: KATI

Karachi: President of the Korangi Association of Trade and Industry (KATI), Junaid Naqi, has proposed
key measures for the revival of the housing sector. He stated that immediate implementation of these
measures by the government could not only prevent capital flight but also unlock $100 billion in
investment potential.
According to Junaid Naqi, the construction and housing sector is the backbone of Pakistan’s economy.
This industry, connected to 72 allied sectors, provides numerous employment opportunities and plays a
pivotal role in driving economic growth. He suggested that to fully activate the housing sector, the
government should reduce withholding tax on property transactions to 1% and declare the first property
purchase tax-free to encourage homeownership.
The KATI President further urged the government to abolish the 3% Federal Excise Duty (FED), which is
legally unenforceable in provinces and imposes an unnecessary burden on the industry.
Junaid Naqi emphasized that the "deemed income" concept is a significant obstacle to the growth of the
housing sector and must be removed immediately.
He also proposed that the government introduce a 10-year fixed-rate mortgage product linked to the
10-year PIB bond yield to make homeownership more affordable. Additionally, he called for the
government to encourage banks to classify the construction sector as a priority industry, which would
drive broader economic development.
Junaid Naqi noted that these measures would not only pave the way for economic recovery but also
help unlock the full potential of Pakistan’s housing sector.