The Punjab government announced the provincial budget for the fiscal year 2015-16 with an estimated outlay of Rs. 1.2 trillion, on June 12, 2015. Finance Minister Dr Ayesha Ghaus Pasha presented the annual budget for the financial year 2015-16 in the House. Chief Minister Shahbaz Sharif was also present during the session. You may know that it was the eighth consecutive budget of the PML-N’s provincial government and people were utterly hopeful for a people-friendly budget. Here, we will discuss the budget from real estate perspective.
After being disappointed from federal budget 2015-16, Pakistan real estate experts had rested their hopes on the announcement of provincial budget. Before the budget speech, the MNAs and CM promised to present people-friendly budget that would bring prosperity in the province, so financial experts and people were expecting a people-friendly provincial budget. However, most of the real estate experts did not consider provincial budget 2015-16 a positive step for the growth of real estate sector in Punjab.
In the current budget, federal government proposed 19.5% tax on internet services, which the Punjab government withdrew at the last moment but it included 10 more services in the tax net for broadening the tax base. As proposed in the provincial budget for the fiscal year 2015-16, 10 new services are brought under the tax net that includes public relation services, corporate law consultants, services provided by chartered accountants, auditors, debt collection services, air travel and transportation of goods by air, supply chain management services, chartered flights, hiring of equipment and machinery services, photography services and sponsorship services.
The government claimed to harmonise the tax system with the rest of country and spread equality in the Punjab sales tax base by including these services in the tax net. Moreover, the provincial government has also imposed tax on immovable property in rural areas. Previously, the government had given exemption of tax on the immovable properties valuing Rs1 million located in urban areas. Now, it has withdrawn the exemption given to these properties in order to enhance equity in taxation on immovable property transactions. Government stated that the exemption for Capital Value Tax (CVT) was being misused by splitting transactions to avoid taxes.
Homespakistan.com Director Asad Mirza is of the view that the government did not propose any plan or take any initiative to meet the challenges of urbanization. It did not put forth any proposal to provide affordable homes for homeless people and to those belonging to low income strata. Though the government initiated Ashiana Housing scheme for poor people in the province, yet no further enhancement or any new plan was rolled out in this budget. Moreover, government did not also show any commitment to provide sewerage and water supply coverage in all towns, villages and cities.
In my opinion, it is a vague urban development plan, where no one has focused on middle or lower income strata while formulating budget. Furthermore, government has withdrawn the exemption of tax given to properties valuing Rs1 million in urban areas.
Author Bio:
Khadija Aslam is a marketing analyst at homespakistan.com and she writes on a variety of subjects including business, real estate, travel etc. Check her blog and find her on twitter, facebook, google+.
