50% Ongoing Construction Projects Halted Due to Hike in Steel Prices

The Association of Builders and Developers of Pakistan (ABAD) has claimed that 50 percent of ongoing construction projects have come to a halt due to a hike in steel bar prices by a cartel of large-scale steel manufacturers.

The ABAD in its budget proposals for 2023-24 informed the Finance minister on Monday that the cartel of large-scale steel manufacturers has jacked up steel bar prices due to the imposition of regulatory duty.

They asked Federal Minister for Finance Ishaq Dar for the removal of the existing 30 percent regulatory duty on the import of steel bars for the revival of the construction industry.

ABAD also asked the government to extend the date of completion of projects under 100 C and 100 D.

Due to prevailing difficult economic conditions which have resulted in a 200 percent increase in the price of construction materials and an increase in bank borrowing cost of construction activities have slowed down to a great extent. Resultantly it has become almost impossible to complete the projects before 30th of September 2023.

ABAD also asked the federal government to remove double taxation on projects registered under sections 100c and 100d.

They also asked to charge a 10 percent capital gain tax if the property sold within 1 year 10 percent, 8 percent if sold within 2 years, 6 percent if sold within 3 years, 2 percent if sold within 4 years, and zero percent if sold after 5 years.

The Association also said that deemed Income Tax imposed under section 7E shall be omitted from the law being regressive in nature.

They also requested to revive the mortgage finance policy for home financing with an interest rate of 5 percent up to 10 million and the State Bank of Pakistan shall give targets to Banks to advance a minimum of 10 percent of their deposits for home financing.

The difference between KIBOR and the minimum rate of 5 percent charged by Banks shall be subsidized by the Government of Pakistan.

The tax imposed under sections 236-C and 236 -K shall be reversed back to 1 percent for filers and 2 percent for non-filers and revival of weekly Housing Task Force Meetings to be chaired by the Prime Minister or Finance Minister.

According to the finance ministry, Finance Minister Ishaq Dar appreciated the proposals presented by the delegation and assured them that the government is taking concrete steps to overcome the economic challenges and for strengthening the economy of the country. He further reiterated that the Government will try to provide a business-friendly budget in order to support the masses and for the economic progress and development of the country.

The delegation thanked the Finance Minister for considering their budget proposals.

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