ABAD proposes tax reforms for construction sector in FY2025–26 budget
- By Anjum Wahab -
- May 22, 2025
The Association of Builders and Developers of Pakistan (ABAD) has submitted key recommendations to the federal government for FY2025–26 budget, ARY News reported on Thursday.
ABAD in its recommendations, has urged comprehensive tax relief and structural reforms for the construction and development sector.
ABAD has called for a 15-year relaxation in tax rates specific to the real estate and construction industry, emphasizing long-term policy stability.
In the FY2025-26 budget proposals, ABAD Chairman Hassan Bakhshi included several significant suggestions aimed at amending the Federal Board of Revenue’s (FBR) regulations.
One of the core proposals is the elimination of Section 236C — which imposes advance tax on property transfers from builders to buyers — citing it as a hindrance to formal property transactions.
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The association further recommended that the maximum tax rate under Section 236K be capped at 0.5%, and demanded the complete abolition of the deemed income tax under Section 7E, which imposes a 1% tax on immovable property even in the absence of actual income, causing undue financial pressure.
Additional proposals include removing the requirement for written approval in tax refund transfers, reducing withholding tax rates, and implementing standardized tax structures for better compliance.
ABAD also raised concerns over the transfer tax imposed on properties purchased in US dollars by overseas Pakistanis, terming it unjustified and counterproductive to investment inflows.