Budget proposals include property tax cuts, funds for industrial development projects

WEB DESK: The government is considering reducing taxes on the purchase and sale of immovable property in the upcoming federal budget as part of efforts to stimulate economic activity, attract investment and generate employment, according to sources.

Sources said proposals have been prepared to lower the tax burden on property transactions and may be incorporated into the budget for the next fiscal year.

Under the proposals, the tax rate for filers on the purchase of immovable property would be reduced from 1.5pc to 0.25pc, while the tax on the sale of such property would be cut from 4.5pc to 1.5pc.

The proposals are currently under discussion with the International Monetary Fund (IMF), which has reportedly expressed reservations about the suggested reductions.

However, government officials believe that easing transaction costs would help revive the property market, increase investment and ultimately expand the overall tax base.

Property market revival

According to sources, the government is of the view that lower taxes would encourage greater activity in the real estate sector, leading to higher tax revenues through increased transaction volumes.

Officials also expect the move to support economic growth by creating new business opportunities and jobs linked to the construction and property industries.

The proposed measures come as policymakers seek ways to boost investment and improve economic sentiment while balancing commitments made under ongoing discussions with the IMF.

Funds proposed for industrial development

Separately, sources said the government is considering allocating funds for several industrial development initiatives in the next fiscal year’s budget.

Among the proposals is an allocation of Rs1.52b for the development of a Special Economic Zone (SEZ) on the land of Pakistan Steel Mills in Karachi.

The project, to be known as the Karachi Industrial Park Federal Special Economic Zone, would be jointly developed through the Pakistan Steel Mills site and the Karachi Industrial Park.

A total of 6,400 acres of land has been earmarked for the project, with the first phase involving the development of Block A on 500 acres within a planned 1,500-acre industrial park.

Sources said the Karachi Industrial Park is one of nine special economic zones planned under the China-Pakistan Economic Corridor (CPEC) framework and is expected to promote industrial activity, attract domestic and foreign investment, and create employment opportunities.

The proposed budget allocations also include Rs700m for a new project aimed at reviving the gemstone sector and Rs300m for the establishment of 1,000 industrial stitching units.

Officials expect the industrial initiatives to support manufacturing growth, strengthen exports and contribute to job creation across various sectors of the economy.