Pakistan meets only half of housing needs

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ISLAMABAD:

Pakistan’s annual demand for housing is estimated at around 700,000 units and only about half of it is currently being met, said Board of Investment (BOI) Secretary Fareena Mazhar.

Speaking at a seminar titled “Construction and Housing for Sustainable Development” in Dubai on Tuesday, she encouraged investors to explore the housing sector of Pakistan, which offered tremendous tax rebate.

She added that the country also incentivised and facilitated project approvals through one-window operation under the Naya Pakistan Housing and Development Authority (NAPHDA).

She pointed out that the Income Tax Ordinance had been amended to declare the construction sector as an industrial undertaking, making it eligible for benefits and concessions available to other industries.

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Regarding tax incentives, Mazhar said that eligible builders and developers were exempted from withholding taxes on the purchase of building material.

The BOI secretary elaborated that any tax payable on the income, profits and gains of projects related to low-cost housing under NAPHDA or Ehsaas programme would be slashed by 90%.

Mazhar underlined that in order to promote housing and construction of buildings (residential and non-residential), the State Bank of Pakistan (SBP) had fixed mandatory targets for banks.

“Accordingly, every bank is liable to ensure that financing for housing and construction of buildings is at least 5% of its domestic private sector credit by December 2021.”

Highlighting that economic uplift was being prioritised by the government, Mazhar stated that Pakistan, under the leadership of Prime Minister Imran Khan, had undertaken bold economic reforms, which helped improve all sectors of the economy.

She noted that despite facing challenges on the economic and geopolitical fronts, Pakistan made headway in restoring economic stability. “Economy is now moving on a positive growth trajectory,” she said.

Further outlining the initiatives taken by the government to facilitate investors, she pointed out that 22 Special Economic Zones (SEZs) were under development, which would emerge as high-end commercial, technology and manufacturing hubs.

Four SEZs were equipped with state-of-the-art facilities and business ecosystems and they were ready for investment under the Early Harvest Projects of the China-Pakistan Economic Corridor (CPEC).

Underlining the strategic location of the country, the BOI secretary said that Pakistan was a promising regional hub and an important destination for trade and investment.

“A wide population pyramid and an expanding middle class make Pakistan a robust consumer market for foreign investors,” she said.

On the occasion, Accor Hotels Vice President Development Jean-Baptiste Recher shared his plans to construct hotels in Islamabad and Lahore. Accor Hotels is currently operating Movenpick Hotel in Karachi.

IHS Group of Companies President and CEO Noman Qamar expressed keen interest in investing in tourism and hospitality sector of Pakistan. He particularly diverted attention towards investment in hotels and resorts in Karachi, Lahore, Islamabad and northern areas of Pakistan.

Published in The Express Tribune, November 3rd, 2021.

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