Karachi: Mian Zahid Hussain, a prominent figure in Pakistan's business community, has expressed satisfaction with the Federal Constitutional Court's recent judgement declaring Section 7E of the Income Tax Ordinance unconstitutional. This decision addresses longstanding concerns regarding the tax on "deemed income" from immovable properties, which has been a significant barrier to economic activity in the country.
According to Pakistan Businessmen and Intellectuals Forum, Mian Zahid Hussain, who holds multiple leadership positions, stated that the business community has consistently argued that Section 7E violates fundamental tax principles by taxing hypothetical earnings instead of actual income. This tax has contributed to stagnation in the real estate sector, which is crucial for Pakistan's economy, especially amid a housing shortage of approximately 12 million units.
The slump in the real estate sector has affected over 40 to 70 related industries, including cement, steel, and transport. Mian Zahid Hussain noted the significant potential of these sectors, such as the cement industry's vast limestone reserves and the steel sector's capacity for import substitution through ship-breaking. He emphasized that the economic cost of the tax far outweighs the negligible revenue it generates, as it stifles employment and GDP growth.
Mian Zahid Hussain urged the government to abolish Section 7E and Section 7F in the upcoming federal budget, advocating for revenue generation through economic growth rather than penalizing capital. He suggested that the Federal Board of Revenue should focus on expanding the tax base via digitalization and incorporating the retail sector into the tax net.
The business leader concluded by highlighting that removing Section 7E would restore investor confidence and stimulate the construction industry, advocating for a tax system based on actual income to facilitate reinvestment and modernization.
The post Mian Zahid Hussain Applauds Court’s Verdict on Tax Law, Calls for Repeal to Revitalize Real Estate appeared first on Pakistan Business News.