Section 7E of Income Tax Ordinance Should Be Abolished Atif Ikram Sheikh

Karachi: Mr. Atif Ikram Sheikh, President FPCCI, has echoed the collective demand of the business,
industry and trade community that the section 7E of the income tax ordinance (ITO) 2001 should be
abolished for being unproductive and unfair for levying deemed or imaginary income on immovable
properties. 7E has produced no significant increase in the tax collection; instead, it has created chaos
and discontentment in the otherwise very vibrant real estate sector, he added.

Mr. Atif Ikram Sheikh stressed that a real estate regulatory authority (RERA) should be established in
Pakistan like other regional countries as no sector can perform at its optimum and contribute to the
national economy in absence of a regulatory authority. However, he added, that this should be done in
consultation with the sector’s stakeholders.

FPCCI Chief also highlighted that the Sindh government collects infrastructure cess on import stage
at 1.25 percent; which translates into PKR. 225 billion per year. Logically, the better part of that cess
should be spent on the infrastructural development and maintenance of Karachi; and, if that happens,
the real estate of Karachi will be in a much better shape and its market will also pick up, he added.
Mr. Saquib Fayyaz Magoon, SVP FPCCI, maintained that real estate can help bring more foreign
exchange to the country in the form of remittances. The sector should make it as their top agenda to
attract investment from the overseas Pakistanis as it will also help the economy through stabilizing
rupee-dollar parity and shore up the foreign exchange reserves (FER).

Mr. Magoon added that, for the sake of policy advocacy in the national interest, any sector that can
contribute to inward remittances should be facilitated and encouraged. Instead of investing in the real
estate of other countries, the government should enable and welcome overseas Pakistanis to invest
back in their home country, he added.

Syed Saquib Shah, Convener of FPCCI’s Central Standing Committee on Real Estate Property and
Builders, said the systemic shortcomings and lack of facilitation for the real estate sector can only be
addressed through digitalization of the registration system; in order to bring transparency, fairness and
validity in the documentation of the properties. Karachi should also get e-stamp system at the earliest
like Punjab has implemented, he added.

Syed Saquib Shah added that taxes are being unfairly imposed; and, the phenomenon is bringing
disenchantment and stagnation in the industry. He also emphasized that taxes should be imposed on
the property owners; instead of the real estate agents – who simply provide their services to buyers
and sellers.