Learn Tax Laws (Amendment) Ordinance, 2020 (Complete Session)

Learn Tax Laws (Amendment) Ordinance, 2020 (Complete Session)

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00:00
the broadcast is now starting all attendees are in listen-only mode hello assalamu alaikum and welcome to all of you in today's groundbreaking session hosted by ACCA I hope you are all as excited about the topic as I am tax laws amendment ordinance 2020 which focuses on the construction industry and basically formalized the incentives announced by the prime minister so let's
00:40
start with today's session bismillah r-rahman r-rahim rubbish release a three-wire cilium reeva looked at in mililani of Kahoot Koli Allah open my heart and he is my task for me and remove the impediments from my speech so that they may understand what I say the men great tree speakers intro are for those who are not aware of me um my name is ahmad zahir mead I'm an FCC a I'm a highly ITIL it
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create and experience finance management economics professional also holding a CFA charter CA b FP CPF a anti money laundering fraud risk management specializations and various other professional certifications on the experience front I have 17 years fund of experience say again by working in top management positions both abroad as well as in Pakistan at the moment I'm working as a managing partner at ml/cc that's
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millennium law and corporate company I'm a managing partner for taxation and corporate services there which and this happens to be the pioneer ACCC taxation an illegal practicing firm in Pakistan I'm also honored to be sitting on the boards of several corporate entities and various think tanks with regards to trainings I believe this is a way to give back to society and I'm honored to have conducted mandatory promotional trainings of government officers at MPD and worked with the likes of National
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Bank of Pakistan each MCB PPC BL Institute of bankers Pakistan in collaboration with the State Bank of Pakistan Lahore Karachi takes bala Hall Karachi chamber Pakistan takes bar uet Berea University and our very own ACCA I also regularly get published in various english-language dailies and research journals they are all listed on your website I'm honored to have been a receiver office he's his exceptional public value and national advocacy
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awards being a life member I'm also the twice serving crunch chairman of Finance Economic Affairs lies in committee and previously four time serving chairman lies and committee of the howtechs Bar Association I'm also honored to be representing Pakistan on the global text forum and I'm the chairman of ACCA as MNT and Taxation subcommittee I'm also associated with various other esteemed organizations as listed but I think that's enough about me I'm gonna skip
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the next few slides which list the key existing clients Association the active academic and professional affiliations and major strengths ml/cc was profiled by ACCA which is a big honor so the link to the profile and mlcc's website are available should you be interested just a professional acknowledgement before we proceed several legislations they should by FBR and the proprietary research and commentary by a millennium law and
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corporate company ml/cc on today's subject have been utilized in the development of this session and the presentation you are about to see obviously a VA it's a two hour session so due to limited time and extensive volume of the topic we have strived to cover the maximum possible content within the available time the content coverage had to be prioritized and managed in order to suit the requirements and constraints of today's session so we have worked really hard
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there was there was a consideration how to go about this because we could have just gone through the entire body of the legislation or we could have just gone on a few points that are being discussed the most but we thought that we should make it as much beneficial for our attendees as possible so we have actually prepared this presentation for you which covers almost all the curve points and we have also provided you
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with the copy of the text loss Second Amendment or tax laws amendment ordinance 2020 as well as today's presentation and also another legislation which is relevant the voluntary declaration of domestic assets leg will be sharing why that's relevant so now that we have discussed this let's begin with today's session so a wider need for this legislation why
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the need to promulgate this ordinance why the need to provide so many incentives to the construction sector and whether some of the incentives are what the popular popular public discourse is making them to be let's find out as you are all aware the world is facing an unprecedented global pandemic of co-head 19 commonly referred to as the corona virus the likes of which don't exist in any of ours living memory
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the last major such pandemic was the Spanish flu our way back before even the Second World War around the 1918 so this pandemic has actually created a worldwide crisis and it's not just a health crisis but it's translating due to the lockdown and other side effects into an economic crisis so much so that some commentators are fearing at least an interim economic meltdown if the government's are not to
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take sufficient action so due to this the industrious industries businesses offices services have been shut down in Pakistan like the rest of the world and the economic activity is practically at a standstill so this set situate the situation has adversely affected Pakistan and all segments of our society and population are suffering economic hardship however the segment that is perhaps
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suffering the most in these existing circumstances are the poor and the most vulnerable sections of the society they include the daily wages in Pakistan who are at the most risk of suffering and facing dangers to their livelihoods so much so to the level that many of them even say that we are not sure whether will die off coronavirus but we fear dying off hunger so these things need to be considered we are all aware of the impact it's making
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in other countries the growth projections have gone into negative in many countries in the u.s. the unemployment claims have reached close to about some people were saying the last figure I checked was 10 million but it was about to go to I think perhaps much higher than that I'll just check the latest figure as well so anyway this is all to point out this situation the economic crisis we are facing so in
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order to protect and revive the economy of Pakistan it was therefore essential to give incentives to the economy and the government decided that it was going to give incentives to the construction industry but with certain conditions so during his address to the nation on 3rd of April earlier this year earlier in this month in fact the Prime Minister of Pakistan announced a special incentive package focused on the construction
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sector with the aim to revive the economy during these troubling times and these incentives were approved by the Cabinet and presented to the President of Pakistan in line with the legal requirements and the president has now promulgated this as the text laws amendment ordinance 2020 and it was promulgated on 17th of April 2020 so
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a very quick overview what does this ordinance entail it involves a conditional amnesty from section triple one covering unexplained income and assets it has introduced a new section of 100 section hundred D in the income tax ordinance 2001 for tax year 2020 and onwards the builders and well pers are given an option to opt for tax treatment
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under the section hundred D which I've just referred to and rules are introduced by way of the 11 schedule which covered the tax rates the rebates rationalizations etc and other income profits and gains not subject to this section shall be subject to the tax as per the provisions of the existing income tax ordinance 2001 so um we decided that the best way to go about
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the ordinance was to first talk about the definitions of the various key terms referred to in this ordinance so then we'll be going through the body of the ordinance or we'll be going through the various incentives and conditions you would actually know what that means so let's start with this first of all the ordinance is basically focusing on three major categories the builders and developers they are covered within the entire construction industry but there would be no industry without the buyers
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so the third category that's covered some what is the purchaser as well so let's find out the definitions a builder as per the definition of techs laws amendment ordinance 2020 would be a person who is registered the first requirement to be registered as a builder with the board we'll discuss this that this would be done by filling up certain forms on iris which is the web portal of FPR so a builder would be
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someone who would be registered as a builder with the board and is engaged in the construction and disposal off residential or commercial buildings so these builders and developers are various partners they're off would be making capital investments so what does capital investment mean a capital investment in the context of this ordinance would mean investment as equity resources and would not include
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borrowed funds so that's something important similarly a developer would refer to a person who is registered as a developer with the board and engaged in the development of land in the form of plots of any kind either for itself or otherwise so these builders and developers would be working on projects what do we mean by project in the context of this ordinance and let me just take a quick breather here to share
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with you guys that this ordinance right now is not only the most recent piece of text legislation but the one most in demand and perhaps the one impacting the businesses the most certainly no doubt about the construction industry as a whole construction sector has now been given the status of an industry that will be discussing about so it is very important that you have a good understanding and a good command of this no matter what you are doing even if you are not working in the construction industry directly or indirectly you
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would be impacted impacted even if your sector is not one of the ancillary sectors or connected sectors or within the supply chain you your honors your clients someone would be buying the property somewhere down the line so it is a good idea professionally as well as personally to have a good understanding of this legislation and the next I think whatever time is left next quarter to two hours or whatever would perhaps be
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one of the most important segments of your professional learning so please do pay all the attention anyway coming back to the definitions the project would refer to a project of construction of a building with the object of disposal that is being referred to the side of the Builder how about the dwell per the definition also covers or a project for development of land into plots with the
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object of disposal or otherwise these projects would be divided within existing projects and new projects and these existing a new project definitions I defined in terms of some requirements so let's find out an existing project would mean a construction or development project which commenced before the date of the commencement of tax laws amendment ordinance and is it still incomplete and
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this project is still incomplete very logical make absolute sense an existing project would be something that was already happening and is not complete by the time the law is being made right but the second requirement now is that this projects project would need to complete on or before 30th of September 2022 so roughly you can say - we have just over
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two and a half years are being given for the completion from April 20 22 September 2022 then a declaration is provided in the registration form under 11 schedule - the effect of the percentage that the project was completed on the last day of the accounting period covered then in Detex year 2019 this is important because as we will be covering in the detailed coverage of the incentives the percent
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of its percentage of the project that was covered that was completed within texia 2019 would not fall under the ambit of this ordinance it would be text in a different manner anyway just remember that the existing project has to be a project that started before this ordinance was promulgated and would need to be completed on or before 30th September 2022 and would need to be segregated in terms of the completion before the promulgation or on the
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promulgation of this ordinance and after this till the due date of 30th September 2022 so a new project by contrast would mean a construction or development project which commenced during the period which period starting from the date of the commencement of tax laws amendment ordinance 2020 which is 17th of April 20 2010 31st of December 2020 so now we have this window
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during which the new projects can start and by start it means they have to be registered with FBR after they get the approval from the relevant Authority we'll be covering that too and these new projects would also have the same completion deadline of just over two and a half years at the most they would need to complete on or before 30th September 2022 to avail all the benefits under this ordinance so now that we have
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spoken about builders and developers and the new projects and existing projects the natural culmination would be to talk about the buyers a first-time purchaser would be a person who purchases a building or a unit as the case may be so it's not necessarily a building it can be a unit mean a plot too as we are covering dwell purrs within the ambit - directly from the Builder and does not include a subsequent or a substitute a
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subsequent or substituted buyer so in addition to a whole building it can be a unit of the building - so what can be a unit of a building think our friends from Karachi should be pretty familiar the phenomena is much more common there we are referring to the flats anyway we'll be discussing these things in more detail just a member of first-time purchaser is someone who purchases directly from a registered builder and it does not include a subsequent or
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substituted by it registered with the board would mean simply someone a builder or developer who registered after submission of forms on a project-by-project basis using the online FB our web portal of iris an area we all know what area means but the legislation's never lead leave anything to imagination it scribed to defines as much things as possible so that the law can be implemented and as minimum as
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possible is left to imagination so the disputes can be minimum anyway area means in case of a builder in case of a commercial or residential building excluding a house the saleable area of the building any area that is not saleable would not cover or fall within the definition of the area and in case of a house the covered area of the house on the other hand in case of our developer area would refer to the total
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area of the project building means a residential or commercial building or unit thereof and commercial building includes any building or part thereof which is used for commercial purposes in accordance with the relevant laws the commencements or the commencement of a project meaning the start of the project would mean in case of a construction project when the layout plan is approved by the concerned Authority and in case of a development project when the
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development plan is approved by the concerned Authority and now why this definition is important because you can see the definition of new project existing project refers to the timeline of commencement of the project so hence it's very important to define commencement and in simple word commencement would be when the layout or development plan were approved or will be approved by the concerned Authority now are talking about the practical considerations one of the issue that we
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often face is the backlog and the time taken by relevant authorities for approval and luckily the effort has been made to address this within the ordinance to try to facilitate the potential builders and developers so provided that where the Builder or developer has taken all the necessary action and done all the things that are required and necessary to procure any approvals but any such approval is delayed
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and a period of 30 days from the date of the relevant application and the cutoff date of 30 first day of December 2020 is not adhered to by the Builder or developer so a scenario where the Builder and Welford filed their application more than 30 days from 31st of December and they did everything right and they completed all the processes but the relevant Authority has not issued the approval yet the board
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may provisionally accept the commencement of such a project on case-by-case basis so the people who deal with these things in practical bases would appreciate how big practical relief this is it could have been even better but something is better than nothing so this brings us to the completion of the project the completion of the project would mean in the case of a builder the date on which the gray structure is complete provided that such
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grace structure shall only be considered as completed when the roof of the top floor has been laid as per the approved plan so what exactly is a gray structure anybody with expertise or any background from the construction industry please type in your question answer box in your feedback box in your chat box so that we can see what you think it is before I tell you what it is and I'm gonna give
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you a few seconds maybe even a minute to do that so please let your feedback come so we can see whether we have someone or some attendees from the construction background as well by the way I've got a very very good question from Taha scurry which I'll be answering tie in the first Q&A break just shortly deshaun Majeed has answered brick structure okay Mohammed must harass okay so a lot of
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interest in the economic scenario the implications etc etc okay okay so basically the crux of the feedback is the brick structure I'm gonna give a few more seconds to see if we get any different feedback otherwise I'll just continue an elaborate amid the romance up says Chris structure is the Gantt chart the unfinished structure okay now
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that's very very interesting Nizam can we unmute her meatza I would like to discuss this and while you are or anything Hameed I just like to make a quick announcement that today's session is the result not only of the members feedback the work of the Taxation Committee which I'm honored to be chairing and I would also like to thank our partners another steamed institution some of the key
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figures from these institution is attending today's session as well so a lot chain of Commerce and Industry particularly my very good friend mr. Kasia fungal from there who proposed that this session should be held in a very timely fashion similarly Lahore Tech's Bar Association another good friend an official of the bar the VP mr. Asha who has also joined today's session and many other friends from various bodies who suggested to us
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that ACCA being one of the leading accounting bodies in Pakistan and the largest global accounting body should hold hold this very important and groundbreaking session helped us by motivating us and by providing us their feedback to organize and go for today's session and let me just share this with you and this bill should make you really proud that as per my knowledge ACCA is the first
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major accounting body to be holding a session in fact the first major organization to be holding a session on the text laws amendment ordinance 2020 in Pakistan so that's a big big leap forward for you so have we unmuted Nizam yes we have our meeting you may ask your question people I saw him Sir this is Hameed from the shower and ACCA
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member working as the manager accounting and fans at hammer mooters my egg project Mora currently is a construction industry Mitchell is small and let me let me answer your Salam and welcome you so walaikum asalam and you are welcome we will be discussing your feedback but before that how is the session going so far I hope you are enjoying it and how do you finding a
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member of ACCA that we are the first body to be holding this session in Pakistan I'm feeling pretty proud that I am an ACCA member or Sabre cup we bought the middle India key model of ACCA is one of the major accounting bodies yogi bug asana is the rocky station rather conductor area or obviously just roughly mentioned here through their belly came a club a session where one of the dough just come de montausier they askin you give me love sorry economy economic
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crisis I have a guess on me so our industry at this affected a so its relief for but love so much Nicky Lee a miracle same Assam Jew or happening organizations for other mclubbe justify the Hathor properly thank you say yep I can you buy the book in Catalan where you yes I'm feeling print out that's great and we are also proud of you so just very quickly coming back to you what we were discussing how meets up you mentioned that the gray structure is the tonsure the unfinished structure would
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you like to elaborate yes sir sure murajjab mclubbe a great structure for example a bin full floor say a breaks cause structural shahrukh are there tika a bill pulled off floor to japan because you unfinished a cup quake finished kind of finished goods okay people unfinished row he came all of us may earth may be rangoon quranic here because several terminologies used through got i guess he's dressing so much magic Oros my mother fittings with again and then you
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kind of finish Englishman a usual without finishing mother with the finishing water that chef was mending you buddy sorry ceases you had those men completed all so this is what he called a great structures are very very well Donna me thank you very much you can mute yourself again now thank you so much sir thank you so amid some must have some background in the construction industry because he explained it very well what he said is pretty much the
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definition but let's formally discuss it so a gray structure in simple word is what would look or appear gray when completed so if we elaborate that more it means the completion of the foundation walls roof with the bricks the cement plaster on the wall underground water tank roof water tank septic tank however it would not include the boundary wall none of these services
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like electric sewage would work painting flooring marble aluminum steel work or face work so it's basically what Hameed also referred to the brick structure the plaster the water tanks etc and obviously the foundation walls and roof fell upon them so a builder would only need to complete this structure and the internal work dividing electricity sewage would work tiling a painting etc
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they are not required to be completed by way of the definition of the completion of the project so if a builder would just complete the gray structure by the due date it would be assumed that they have completed the project in terms of the requirement of this ordinance on the other hand for the developer the date the completion of project would be the date on which at least 50% of the total plots have been booked in the name of the buyers and of those bookings at
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least forty percent of the sales proceed have been received the landscaping of those plots needs to be completed and at least 50 percent of the roads would need to be laid up to the sub grade level as certified by their proving authority or Ness Park so there are four conditions now for a developer for the project to be termed as completed number one the landscaping should be complete number two at least 50 percent of the road
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should be laid up to sub grade level and certified by the relevant improving authority number three at least 50 percent of the plot should be booked in the name of the buyers and at least forty percent of the sales proceeded from them being received off why because these entails some checks which X we'll discuss them in a bit but I think now is the time to take some of your very interesting questions are you ready Nizam for the Q&A while
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will get Nizam let me just very quickly share with you that the ordinance became available the actual draft of the ordinance I'm going to show you and there's something very interesting going on off on top of the ordinance which shares with us that this is the copy that has been given to the fpr as a proof by the president and the copy that would be published in The Gazette the Official Gazette is yet to be released and this copy was released by FBR only
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yesterday yesterday on fpr's website and ACCA is delivering this session today so how amazing is that anyway I think we have Nizam with us now yes sure so let's start with the questions nizam my most favorite part of every session thank you so I think these are comments on the greatest structure we have right now we
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want me to read them out no no Nizam if you scroll up to the ha screech that's right after where you shared the link of the Google Drive for handouts so the first question is there and it's asked by mr. Taha scurry okay I don't seem to find a mr. Powell's question I'm sorry um I'll I'll go for this question myself you just keep on scrolling up can you
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locate there so Taha asked what benefits or loss does the government for see that it has enforced the requirement of the completion date of 30th September 2022 a very very good question to her and just the kind of question I expect from our attendees and our members in fact I would like to speak with Baha is it possible to unmute Ameen ISM it is
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possible so please do so it's Tomas Cree yes my great sir yes you are okay you need to unmute yourself and you will be able to converse so yes go ahead assalamu alaikum salam aleikum walekum salam so how ok we need to hang on so one can go first let me do it assalam alaikum and welcome to ah how are you and how are you enjoying the
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session today well aleyküm selam sir i'm very well and this session is very informative and thank you for conducting itself the pleasure is all mine Taha would you like to quickly introduce yourself before we discuss about your question lutely sir Sam an ACCA member I've been working since over eight years at four different banks which includes a Habib Bank ICBC Bank alfalla and Telenor microfinance however for since the last one year I've been working towards a startup which I have been working and
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we've pitched it to a corporate it's fin tech startup so basically this is what I'd be doing that's really amazing and that's really good to know so Taha you have asked a very very interesting question how did you think of it our UI in the construction industry no sir but we are very interested in this low housing project scheme projects actually and we actually pitched I don't know if I should say this because I have an NBS I called for it but we wanted to see
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explore this Avenue of 3d printing with one of the carpets or building this low-cost housing I think if you people are aware of the P following news this recently Dubai there was a municipality company that was built by a 3d printing company yeah so we have an interest over there and we've been looking at options and this certain corporate is also interested in hearing us out so this is why I came up with this case that is really really amazing aha and it would be great for Pakistan this is a really good question you have
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asked and let me tell you why did the government enforce this the thing is this the government is focusing on two things number one it wants the construction industry to start immediately and for the rest of this year which is expected to be hit the most by this ongoing economic crisis and not just in Pakistan throughout the world the head of ACCA Pakistan Sajid that session a few days ago and he
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shared some slides of projections by various different bodies across the globe and most projections expect that if coronavirus is controlled then from next year the economies can start reverting back to the normal the new normal at least so this ear is the one that is critical so the first thing that the government was looking for was to motivate the construction industry to go into action immediately and for that they have given the commencement clauses to start before
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31st December 2020 now even if someone starts the project they can really stall that mean they got it approved and the definition the requirement of commencement as per the ordinance would be met but the actual work would not be going on so the actual aim of the government of the money flowing into the sector of the people getting work of the different ancillary industries going into motion the economic activity being generated would it be happening I hope you are with me so just think about the
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commencement requirement the commencement was only approval of the map or the plan so that can be done with very little investment specially if you are already holding the property and even if you buy the property that would not create the economic activity that is we being envisaged so this requirement would actually push the builders and developers to go into action to actually go in the construction activity because they would need to be a bit efficient if not more if they are to complete the
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project within two and a half year so that is the reason for the government to enforce this requirement I hope that answers the question if this sir absolutely thank you so much you are most welcome you can mute yourself again let's continue with the other questions now and nizam do you see a it's amazing we have spoken to our two members and mashallah one is working in a very very renowned company and the other is also working in the FinTech sector with one
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of the most upcoming technologies so it's amazing how our members are doing all these wonderful stuff what do you think yeah sure all efforts of our teams and around the globe they work very hard I being an intern I see them work for members students so tremendous and rmnp and Taxation Committee also works very
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hard in consultation and input so to them as well I've been on a recent grid that was very fruitful that's great okay let's continue with the questions now Needham did you locate the other questions the next one is by Mohammed Essen yeah so this is the same question I asked you some time earlier general question all the property price is going to rise off the construction industry
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announcement so I hope this is not a planted question by you that was on a lighter note I know you well enough okay mother that is a good question and a question on many many minds many of the clients many of your friends in fact Nizam here also asked me this question in fact I was discussing this with our partner and the chair of the Lahore tech's bar Eccl isin committee Ali the human to that what would be the impact
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on the property prices because there are various factors you have to consider number one is the economic slump the downturn the economic downturn people are going towards safety first approach we have seen what happened with the markets the oil markets the physical delivery market contracts of western Texas crashed yesterday but that can be attributed to the crunch scenario plus the physical demand we also know that in
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a scenario like this in an unprecedented pandemic people most of the people tend to go for safety first approach however with these incentives many builders and developers and financial institutions are looking to work in the construction industry so that all that work happening what can happen and the impact on supply and demand so there are various factors as we will see in this ordinance a sort
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of amnesty has been given this amnesty covers the major practical hurdle which actually kept the investors away when the our tax rate forms regarding construction sector were introduced a few years back so a basically section triple one covers unexplained income and assets and it basically allows FPR to ask anyone where does your income and asset comes from because it doesn't confirm with your declared sources or which are declared
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text returns so a lot of investors in Pakistan were not declaring a lot in their tax returns unfortunately the culture of tax avoidance and even people coming from abroad were not normally making appropriate declarations as per the law so when detects a forms happen although the law was already there but the FBI started enforcing that for the construction sector so what happened was that a lot of investors got scared that's what will we answer where did the money come from we'll have to give the
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sources we'll have to give the documentation and people especially people who did not either have the adequate record or who would involve in activities like text avoidance felt very uncomfortable they took their monies out and went to other safe havens like the Gulf we know for a fact that a lot of money that went out of Pakistan's construction industry went into Dubai in UAE and other states of the emirate as
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well so the major consideration of these investors was to not text it was section triple one so what this ordinance does is provide them an MST so many of the people many of our clients that I've spoken to in the construction industry - are really hopeful that they'll be able to get at least a good number of those investors who stopped investing in Pakistan back now that this msg has been introduced however I believe there are a few points that needs the Fineman and
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clarification in this ordinance and it would really depend on how many investors can be motivated and they come back in Pakistan or before we can really assess and give a learn aid assessment of the price impact of the property sector but werden thing would be that the depression on the prices of property might neutralize to what extent and how much it goes into green or whether it doesn't at all
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remains to be seen as to the impact as to him the impact more so on the investors coming back in Pakistan because the demand is still there the genuine demand is there what really drives the property sector in Pakistan like in most of the developing countries who are investors so I hope that answers your question in detail let's count I actually answered this question in detail because this is a very important question and it's important that we understand the
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economic repercussions so let's continue Nizam thank you so much for answering the questions so we have Nabil Ibrahim asking a declaration is provided in the registration form under 11 shall due to the effect of percentage of the project completed the last date of the accounting period pertaining to the tax year 2019 so he wants an explanation on this point sure Nabil I have explained this point before first of all welcome in the
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session but let me just explain it again for you basically we have discussed the existing projects that were in existence before the commencement of the salt ordinance and that were not complete would be allowed to fall within the ambit of this ordinance however the work that was already completed would be treated for tax purposes under the tax laws in existence before the
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promulgation of this ordinance so for that the project the existing project would need to be segregated as to the proportion that was completed before the promulgation of the ordinance so the last X here that last completed texia was Tech's here 2019 so by the end of the accounting period that falls in texia 2019 of that business which is were or individual that was running the project would need to be segregated so
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that the percentage that was completed till that point in time can be treated as per the laws in force for Tech's here 2019 I hope that answers the question next one soccerkitty if one of the most important definitions amended was that of industrial undertaking can you indeed suck it and that's a fantastic question that's what we are about to cover in the next section I think that we should now
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go back to our session because the question might start relating to the slides that we are to cover so let's go back to our presentation and we'll come back for the next Q&A in a bit so let's continue with the definitions we were covering so low cost housing would mean a housing scheme that would be developed or approved by a NAFTA which means the nya Pakistan Housing and Development Authority or under the Asajj program Ness pact would refer to national
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engineering services Pakistan an S PAC is being referred in terms of certifications and approvals residential buildings would mean a building which is not a commercial building but does not include buildings used for industrial purposes either saleable area in case of buildings would mean saleable area as determined by the approving Authority or map approving Authority or the mess park under the relevant laws unit means a
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self-contained or independent building or a part thereof including houses apartment shops offices flats etc and we have covered all the basic definitions and we are ready for the main core incentives and their conditions are you ready guys yes you are so let's continue the first major incentive is that the definition of the industrial undertaking
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has been amended by introducing sub-clause double-a under Clause 29 C in Section 2 of the income tax ordinance what does it say let's quickly read and then I'll explain it to you this new sub clause that has been inserted reads as from the first day of my 2020 next month a person directly involved in the construction of buildings roads bridges and other such
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structures or the development of land so both builders and developers are covered within the definition to the extent and for the purpose of import of plant and machinery to be utilized in such activity subject to such conditions as may be notified by the board so what happens here is that the definition of industrial undertaking is being amended to include the construction of building road bridges and other such structures
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or the development of the land and it will basically facilitate the import of plant and machinery machinery to be utilized in all such activity subject to any condition that the board may notify to keep some controls and checks so basically the biggest incentive for industry undertakings is when they import different plant and machinery they get serious tax breaks and rebates and tax credits etcetera so now that same treatment would be extended to the construction industry as well by view of
48:58
this change and hence it is a big incentive for the construction industry one of the prime issue with the construction industry as the people involved would know that many of our plant and machinery is old so just like one of our member was sharing their planning to indulge in the 3d setup so any plant and machinery that they'll now be importing for that CD set up by virtue of this definition would fall in the construction industry being an industrial undertaking
49:30
and until the serious tax incentives that are available to other industrial undertaking so this is a big big incentive for the construction industry then fix rates of income tax have been introduced as a final discharge of the text liability and you have the table in front of you this is exactly as the table in the ordinance but ml/cc has prepared an excel so it becomes more visible and easier to use for you you
50:02
have this presentation so do use it but be courteous enough to refer to ml/cc as well anyway um you have four columns the first column refer to the area this next two column refers to the major cities in Pakistan so column two is Karachi Lahore in Islamabad and column three is had about secure molten lava Rawal Pindi Kujo palace I wall Peshawar Madan after bath and Kota and the column four is urban areas not specified in column two and three so the text rates in respect
50:34
of these areas have been divided into four segments the first segment is the text on builders for commercial buildings and the area the project for text on builders for commercial buildings is irrespective of the size it can be any size there would be a fixed X in Karachi Lahore Islamabad for commercial buildings and in terms of any builders undertaking commercial projects it would be 250 rupees per square foot
51:05
in the cities falling under column 3 it would be lesser rupees to 30 per square foot and in any other urban areas other than column 2 & 3 it would be just 2 rupees 210 per square foot whereas the text for builders for any residential building that they built up to 3000 square feet in Lahore Karachi Islamabad it would be only rupees 80 per square foot and for 3,000 square feet and above it would be rupees 125 per square foot
51:37
whereas for the cities in the column 3 up to 3000 feet of residential building it would be only 65 rupees per square foot they asked for three thousand feet and above that would be about 110 rupees per square feet and for any urban areas other than column two and three for residential building projects it would be just rupees fifty per square feet up to three thousand square feet and rupees 100 per square foot above that limit now let's talk
52:11
about the developers for the entire project of a developer that happens in Karachi Lahore or Islamabad without any restriction of the size the fixed rate of income tax would be 150 per square feet a square yard sorry so now we are talking about scale yard instead of square feet for the cities appearing the urban centers appearing in column three the techsan developers foreign type project in these urban centers would only be 130 skip per
52:42
square yard and as mentioned in column four for any other Orban urban areas the text for developers would only be 100 rupees per square yard for development of an industrial area so now that's being separated for the developers for development of an industrial area of any size in Lahore Karachi Islamabad that fixed rate of income tax would be only rupees 20 per square yard and it would be the same for the urban centers appearing in column three and it would
53:14
be even half exists rupees ten per square yard for any urban centre other than in column two and three however a few finer points to note in case of mixed-use buildings having both commercial and industrial area respective rates mentioned above shall apply to the respective development to the respective building of the commercial use and the industrial use in
53:45
case of development of plots and constructing building on the same plots as a single one project both rates shall apply provided that in the case of loop most housing and all projects developed by NAFTA the higher of the rates shall apply so I hope this is a major incentive and is taken in that positive spirit and it was actually a big demand of Abad and many other builders and
54:17
developers many big names that a fixed X liability be fixed so that they can be saved from audit they nestea be declared so many of their demands have been met so hopefully we'll be seeing a lot of construction activity in the days to come as well as the irrelevant activity next major relief after the fixed rates incentive and declaration of construction sector as an industrial undertaking particularly in lieu of the import of the plant and machinery required for the works thereof for the
54:50
construction works be it building or development another major incentive is the exemption from CVT by way of a change in the Finance Act 1989 as well as the exemption from turnover tax under Section 1 1 3 1 1 C so it basically falls very beautifully with the introduction of fixed ex rates that now these six tax rates have been introduced and they have done away with the turnover tax under Section 1 1 3 1 1 3 C
55:21
so first of all CVT changes have been made in the Finance Act 1989 and CVT has been exempted but we do know that the province's now have the power specially post 18 amendments autonomous rights the provinces now have the power and are expected to legislate for the same and the provinces but by making a change in the Finance Act 1989 the CVT is being exempted for all kind of property
55:52
transactions within the territorial jurisdiction of the Islamabad Capital Territory section 1 1 3 and 1 1 3 C of income tax ordinance 2001 shall not apply on the turnover income profits and gains of a builder or developer for a from a project and obviously when we are talking about builders and developers we are talking about the builders and developers who register themselves with the FBR otherwise they would not fall within the definition of the builder and developer
56:23
it's very important to not lose sight of this that we are talking about these terms builders and developers in the context of this ordinance so those requirements need to be made met anyway exemption from capital gain tax a lot of discussion has been about this that o capital gain tax has been exempted it's or whether it's been abolished so what exactly is happening let's see so there will be exemption
56:57
from capital gain tax in case of the sale of a constructed residential property provided three conditions are met number one that at the time of sale the residential property was being used for the purpose of personal accommodation by the resident individual his spouse or dependents and for which this is important any of the utility
57:27
bill any is issued in the name of such individual so it can be an electricity bill it can be the sewer gas bill so any utility bill should be in their name and the property should have been used for the personal accommodation the land area of the property should not exceed five hundred square yard in case of a house so that's roughly I think about 16 and a half mullahs if I talk in the typical language that we mayor many construction
58:00
projects but people are well versed with the square yard and square feet two or four thousand square feet that's I think 16 and just about under 16 and a half my loss or close to 16 mud was somewhere in between that's the quick calculation on top of my head anyway the land area of the property not exceed 500 scared in case of a house and 4000 square feet in case of a flat
58:31
and exemption under this clause has not previously by been availed by the individual his spouse or dependent so if these three conditions are met and you are selling a constructed residential property then congratulations you will be exempted from the capital gain tax another major incentive there are some other miscellaneous incentives that the builders and developers will be able to enjoy so firstly there would be no bed
59:02
holding text on the services such as plumbing electrification shuttering and other similar services other than those provided by the companies so the builders and developers would not need to make the deductions under Section 1 5 3 so similarly there would be no withholding taxes on the purchase of material except for cement and steel so changes have been made in sections 1 50
59:34
and section 153 of the income tax ordinance 2001 to this effect by way of the text laws amendment ordinance 2001 text free dividends paid by such companies which companies the single object companies that would be registered with FPR and do be these companies would be builders or developers opting for taxation under this scheme and these dividends would be paid without withholding tax deductions
01:00:04
on such dividend payment so again it would be a big incentive to the shareholders the investors of such companies they'll be getting their dividends from the company tax-free and the businesses the builders and developers that will now be involved in the construction registered the project with the fpr properly - iris would be able to take credit or white the income up to ten times the amount they'll pay as tax so if a builder and well / end up
01:00:35
paying tanker or Aztecs they'll be able to buy ten hundred Corolla off their money as white income the implication in terms of tax planning in terms of future in terms of section triple one are amazing reduce rate of advanced tax on auction of immovable property will be enjoyed by the Builder and well per of just 5% previously the rate of advanced exxon
01:01:07
auction of a movable property was ten percent and the tax on projects registered under the low-cost housing scheme are beat by near pakistan housing scheme or other as a proof would be further reduced by 90% so if the text liability was to be let's say 1 crore of a big project and that project is actually a low-cost housing project so that would be reduced by 90%
01:01:39
so one crore would become 10 lakh only can you see all the benefits in addition to other benefits the text liability would be further reduced by 90% so i say these are some pretty pretty amazing benefits now the next one one of the major one and perhaps the one that is going to be impacting the property prices the most is the amnesty it's not
01:02:11
referred to as amnesty but it's what the text professionals the property at the construction industry and the ordinary masses are calling it so we have included the word amnesty formally it's being referred to as exemption from section triple one of income tax ordinance 2001 which deal with the unexplained income or assets before we talk about this MST i think now would be a quick time to take some questions what
01:02:42
do you think is armed ready for that oh sure let's do it then let's continue from where we left okay so question for from Monique of thoth on how will the purpose accelerate the Pakistan's economy understanding that the purpose of recruiting the daily wages linked to the construction would that really be
01:03:18
achieved assuming gatherings are risky okay that's a very very interesting question okay money you have basically asked two things one is the economic consideration and the other is the health consecration so you have asked how the proposed benefits would accelerate Pakistan's economy I believe I've discussed them in sufficient detail the aim is to get builders and developers and buyers all
01:03:50
of them motivated to start working investing in the construction industry for builders and well first to start doing the construction work did well for development and building work and thereby provide jobs to daily wages as well as to ancillary industries how would that impact in terms of gatherings the government the local administrations the provincial governments are releasing SOP standard operating processes how the
01:04:20
work would be done how many people can be in an environment how much distance would be kept between them whether they would need to be wearing the masks this hand sanitizer Asian that would need to be there for some bigger projects that would walk in gate to gates the walk to sanitization things that are now the new in demand thing for many businesses would need to be introduced regular temperature would need to be chair taken so those SOPs would need to be
01:04:53
implemented one thing that would need to be taken care of and we do hope that it would be the actual implementation of Soapy's so the administration would need to be really careful and ensure that these SOPs are implemented and we believe especially the builders and developers who would be undertaking these big projects would not shy away from some minor expense for the sake of the continuity of their own business as well as for the health of the masses and hopefully if the activity does start
01:05:24
taking place to the extent envisioned it would read the economy more than 50 to 70 industries as per various studies are said to be linked with the construction industry so if the construction industry start working all of those industries would start working the daily wages would start getting employment etc so the economic wheel would start going forward and thereby the ancillary banking and finance industry would also start getting businesses and these are
01:05:56
some of the prime industries that drive the engine of pakistan's economic growth the agricultural industry has already been given various exemption and has started the world so all these action taken together I think the government is trying to do whatever is possible within the context to revive the economy it can be argued that certain other industries could have also been given similar incentives but the sky's the limit in
01:06:29
terms of D wishes and the dreams and certainly those argument arguments would have their own merits but let's say something is better than nothing and the ordinance is very well received let me tell you from the construction industry there are a few clarifications that are still being sought and they are being awaited to be issued but overall the sentiment and reception has been very very positive and many builders and developers are really looking forward to
01:07:00
go into action now let's hope this translates into action too I hope that answers the question next one so we have sad road in Germany asking keeping in view the repetition of sind building control authority do you think a builder will be able to get his drawings approved in time and if not then the date of September 2022 is a bit unrealistic can you unmute Sidhu Dean sir please sure
01:07:37
thank you so so drew Dean you are being routed please converse assalamualaikum waalaikumussalam such a thin Saab how are you today I am doing muscle are very good how about you I'm very well sir thank you are you enjoying the session today excellent sir excellent thank you you're great sir say you are very kind I'm humbled
01:08:12
would you like to briefly introduce yourself before we discuss your question yes my name is sad rudin giovanni i work for it oil and gas company in pakistan in twin karachi and just you know being a local karate aight i know how things work and nothing the reputation of different officials working in the same building intro authority so i was thinking you
01:08:43
know it's really good that the federal government has issued this ordinance but when it comes to the provincial Department getting approval and we are all aware you know what kind of practices are followed there so it will be it will be an issue for a builder to get his master plan and all of those drawings approved in a in a civilized manner very very good question that you have asked and in fact from your
01:09:14
question it appeared to me that you are either builder our developer or involved with the construction yes yes I think I am I work any company but at the same time I'm a sleeping partner in a you know in a joint venture informal joint venture with friends who build the Anglos and then they sell it mashallah so see I could guess your profession from your question rightly thank you sir thank you sir yeah welcome sir dude in sub I have
01:09:46
briefly discussed this but I'll elaborate this for you because it's a very good question yes these are practical issues we know for their capacity issues they are also other unfortunate and unethical dealings in at least some of the officers in various bodies as you have mentioned that is the reason that the time two things have been done firstly the time is given till December that you have to register
01:10:16
yourself and the project completion date is given for September 22 so your question about the approval the relevant time for that question is not 30th September 2022 it is 31st December 2020 that is the date by which the plan the maps have to be approved now turn to now coming on to your question firstly why did the government do that the reason being this is the time when the government want the
01:10:47
builders and developers to spur into action because this is the time even ethically and morally we shouldn't sit on the money we should put that into work plus this is the time when they want the jobs to be created the economic activity to happen make sense now yes now to the actual core of your question they have tried to build couple of things within the legislation to address this number one they have given the time till end of December that is almost 8
01:11:20
months plus to get the approval so how long can the authority delay one month two months women but we know when some of unscrupulous things happen it can be much more so if such a scenario happen they have also added the provision that if you did all the things you filed everything as was required you have followed all the legal requirement and you filed that at the maximum by 1st of December so 30
01:11:52
days before the cutoff time and the authority did not approve it within 30 days then the FBR would still allow you a provisional registration okay so they have tried to cover that thing within the ambit however we are aware that post 18 amendments the provinces have gotten a lot of autonomy and many rights and the Federation can't really interfere or force them to make
01:12:25
certain legislation so it would be up to the provinces and we do hope that the provinces will also legislate and introduce controls to improve their relevant authorities because then the businesses will be facilitated more as we know the better the business ecosystem the better the results would be I hope that answers your question sir two things up absolutely sir you're very thorough thank you you are most welcome can you mute nizam and move on to the
01:12:56
next question please you so while we are getting his arm back I'll be continuing on with the questions next one is by mr. Hameed Oh Ramon sir why is the time horizon only two and a half year I mean the project in construction industry would usually take more than two years would you address this Hameed I have already answered this but nevertheless I would answer this again for you and for the benefit of all our attendees basically the project is
01:13:38
considered in a proof project once the maps or development plans are approved what what is there to motivate a builder and developer to actually go into construction because the government really wanted construction activity to kick in remember so that jobs can be created so that the ancillary industries would get the demand and their industry it would start industries would start rolling in so that the missed plant and machinery might be imported and build the capacity national capacity of the construction sector so what would there
01:14:10
be to motivate them this is there to motivate them by giving them two and a half years to complete the construction project now if I'm a builder and developer and I know I'm starting a project and I need to complete that within two and a half years I would go into action quickly and let me tell you not all project take two and a half year yes many mega projects where you are building entire cities etc might take that much time but what is required here for builders the completion of the GRA
01:14:42
structure and for dwell per completion of the main roads up to a certain standards the basic layout thing that is being done etc and booking of 50 percent plots and getting payments of 40 percent amount thereof one should be able to do that in two and a half year and this is basically done to keep a check on builders and developers to actually carry out the construction activity rather than just register their project
01:15:13
and sit back and enjoy all the benefits and amnesty hope that answers your question and Sidhu Dean Jumaane mentioned WTI it created in negative yesterday just for your information yes sir dude in sob I'll be releasing a short video clip on that too but I've been getting a lot of questions and I think we have some time so let me quickly tell you there is a lot of misconception about WT i WT ia is the West excess basket basically these
01:15:44
required physical settlement and this happened in the futures market which were being settled so what happened was these futures contract that were being settled but the people who bought these contacts either didn't plan to take the physical custody they just planned to roll them over but because of the current scenario not many people are willing to take a physical capacity
01:16:13
rollover or this simply did not envision me as most of us circumstances and did or either word new players and did not adequately plan or are not able to get adequate storage units so now what happens nobody is willing to take the physical delivery of WTI okay so this actually crashed and traded and negative that you actually have to pay people to get it off your hand it is a common
01:16:45
phenomenon in Europe etc that when many of these stores etcetera are clearing out they offer crash and if that doesn't work at times the pay people to take that stuff because this storage is so expensive there so the same concept somewhat came in here on the other hand if you look at the other oil contracts the normal one even the future contracts that are settled in cash they have not crashed they are trading between 18 to
01:17:16
26 dollars and by the way Pakistan does not deal in WTI pass kit we mostly by our oil from the Gulf states etcetera and we haven't been craning much to my knowledge in the WTI physical delivery futures so unfortunately it's not gonna benefit us just for information.i because this was so relevant and so happening a topic I just gave a quick update to all our attendees I hope that gives you a fair idea of what actually happened with the petrol
01:17:48
markets next one want em nestea schemes encourage money washing with the scale of balance of benefits from this window of opportunity out where the efforts the PM was making a priority of a very very good question and one that I think we should hold on to moon mony boffin Shafi Saab till I covered the amnesty which I'm about to do in the next session so
01:18:21
let me see if we have another relevant question then I go back and finish off the session and take the Q&A can we say that the impact of this is dependent on the investors or dwell pers Emmet Walker II I've already answered this question Rabia shams asked my question is regarding the overall income tax implications and service-based industry operated in Pakistan and it's not related to the topic discussed in this webinar can I contact you after the webinar for discussion in this regard
01:18:51
Sarabia you can I always share my contact details at the end of the webinar the best way to reach me is through LinkedIn to coordinate a time even if you want to speak or otherwise send in your theory I'll also be sharing other details but the really fast way is LinkedIn that's what I will recommend and you are all welcome it doesn't mean if the session end I'm never gonna be answering you you would still be able to contact me and it would be my pleasure to guide you all saluting Jim Giovanni
01:19:22
Saba saying in my view fix weights and scale feed will be charged by builders and developers to buyers they will stay tax free as they will gross up the price to include Texas well we know the business practices that happens the cost is normally passed on but even the benefit or the wise of a fixed rate text it removes the ambiguity and it also removes the question of audit it removes excuse me it removes the fear factor that normally the struction industry half so that could
01:19:53
actually encourage builders and developers to take part in the construction sector this one isn't for us correct me if I'm wrong so if a builder construct a to flow building on a 120 square yard feed the total income tax liability would be this month without respect to the amount of profit he or she makes so the crux offer is ones question is whether it would be a fixed rate of income texts without any regard to the profit the answer is yes respond arson is saying
01:20:23
I'm not in construction okay I think we have taken sufficient questions we'll come back to the other questions we know there's a lot of interest so you'll be able to ask me the question in the next Q&A stage I think we have about 3540 minutes left so let's finish off the amnesty and we'll try to even finish off the other section if needed and then go into the Q&A session so a one of the major incentive that has been demand of
01:20:55
the construction industry as well as the property are dealing industry as well has been the MST or exemption from section triple one let's find out what does this amnesty entails so the provisions of section triple one shall not apply to capital investment made in a new project under sub under clause a of subsection 1 in the form of money or land subject to the following condition if the investment is
01:21:29
made by a builder or developer being an individual now remember a builder and developer can be individual AOP or company and all these scenarios are covered so first things first if the build or dwell per is an individual and they make the investment in the form of money such as such a builder or developer would be required to open a new bank account and deposit such amount in that account on or before 30 first year of December 2020 however if they
01:22:00
make the investment in the form of land such builder and well per shall have the ownership title of the land at the time of the commencement of the ordinance that is 17 April 2020 and the money or land invested shall be wholly utilised in the project newly registered and commenced by 31st December 2020 so if they do this then any money or land they are investing in the project would be
01:22:31
exempted from the section triple 1 of the income tax ordinance if the investment is made by a person in a project by way of a company or AOP then the first requirement would be that such company or AOP should have been in existence as a single object company builder or developer company or AOP registered under the relevant legislation be it the Companies Act 2017 or the partnership act 1932 after the
01:23:01
date of announcement of the tax laws amendment ordinance 2020 and honored before the 31st day of 2020 so such company or AOP should be a single object company that should have been in existence or should be in existence on or four-thirty first day of 2020 so the window you have to incorporate this company or AOP that should be a single object company is after the date of
01:23:31
commencement 17 April 2020 till 31st December 2020 the second requirement is that the person shall be a member or shareholder himself of the AOP or the company as the case may be and if the capital investment is made in the form of money logically speaking same as in the case of individual in the case of AOP or company such money shall be invested to a cross banking instrument but deposited in the bank account of the
01:24:02
EOP or company on or before 31st December 2020 and if the investment is made in the form of land such land should be transferred to that AOP or company on or before 31st December 2020 and obviously if you are transferring if a person is transferring the land they shall have the ownership title of the land and that ownership title should be with them at the time of the commencement of the ordinance so the money or land invested shall also be
01:24:34
wholly utilized in the project so they can't do that put some money in then later on take this out and say oh we have an amnesty no the money that you are investing has the Ministry and that money should be wholly utilized in the project same should be the case with the land so the project that these money would be invested in would also need the completion certificate remember these projects would need to be completed by 30th September 2022
01:25:06
so that would be giving a life of a time period of two and a half or maximum three years in case of existing projects a project need to be completed 30 by 30th September to 2022 which is also the relevant date are applicable in the case of these certifications below for builders the maps would need to be approved the maps would need to be certified the map approving
01:25:39
or authority or nests pack shall certify the completion of gray structure as per the approved map by 30th September 2022 for dwell pers the map approving Authority or Ness Park shall certify completion of the landscaping and at least 50% of the roads up to subgrade level the two requirements for the developers the other two would need to be certified by an I cap QC are
01:26:10
satisfied satisfactory rated firm duly notified by a peer so not all those firms can do only those firms that satisfy this requirement and are notified by a PR would then certify that at least 50% booking of the plots and forty percent of the sales proceeds have been received this certification would be required for the relevant projects to avail the amnesty the amnesty does not end with the builders and developers
01:26:42
obviously if they are no product purchases no buyers there would be no amnesties so the purchases are also given relief they are also incentivized we have also mentioned about the tax reliefs for the buyers before we have spoken about the capital gains tax exemption now we are talking about exemption from section triple one the practical amnesty from the fearful unexplained income or assets the
01:27:12
provisions of section triple one shall also not apply to the first purchaser first purchaser of a building or a unit of building purchase from builder a builder is the registered builder with APR in this case in respect of the purchase price of the building or the unit of building so the amount they have paid to buy the building or unit or building exempt from section triple 1 of income tax ordinance but subject to the following conditions number one the full
01:27:45
payment should be made to across banking instrument to of the Builder during the period starting from the date of registration of the project of builder with the board so it can be any date between 17 April 2020 to 31st December 2020 and ending on 30th day of September 2020 so between these dates the payment can be made so payment can
01:28:16
be made from 17th April 2020 if the project is registered on that date I would doubt that normally it would take some days some time periods so whenever the project is registered from that date until the date of completion of the project as envisioned in the ordinance which is 30th September 20 2004 chaser can buy it the building or the unit and the amount that they are paying would be true across banking instrument and that full amount would entail amnesty from
01:28:47
section triple 1 and err the full or balanced amount of payment is made through a banking instrument during a period starting from the date of registration of the project with the board under this section and ending on 30th September 2020 2022 in case of purchase is from an existing incomplete project so if you made the purchase from a new project then definitely that would be the date of registration 10 30th
01:29:17
September 2022 what if you made purchase from an existing project that started before the ordinance was promulgated yes you would still be able to avail this but the payment the purchase the full or balance amount of the payment should be through a cross banking instrument and that full or balanced payment should be during the period starting from the date of registration of the project with the board under this section and ending on
01:29:49
30th September 2022 this is very very important okay so we have spoken about the purchaser of building or unit what about the purchases of plot will they be able to avail them Nestle - a big question especially for the developers and the property dealers well the good news is with some conditions yes they can the purchaser of a plot who intends to construct the building they're on would be able to avail them
01:30:22
nestea if the purchase is made on or before 31st of December 2020 this year so that then they can start the construction within the due time period the full payment is made on or before 31st of December 2022 through a cross banking instrument these are good requirement are going towards the documentation encouraging the documentation construction on such project should be commenced on or before
01:30:54
31st December 2020 and such construction as as the requirement for builders and developers for completion of their project should be completed on or before 30th September 2022 and this person should register himself with the board on the online iris web portal now so far so good but some of you would be thinking and asking the question and his arm pay attention because I'm answering this question and you should be able to skip this question now during the Q&A
01:31:28
break what about the people involved in the crime proceed what about the money laundering and terrify nan Seng and the FA TF implications well the law has made exclusions any holder of public office as defined in the voluntary declared Eckler ation of domestic assets Act 2018 or his venomoth arse as defined in the Benham e transaction prohibition at 2017 or his spouse or dependents would not be
01:31:57
able to avail this amnesty so holders of public office are defined in detail in the voluntary declaration of domestic assets at 2018 and this has been shared in the handouts with you and this is pretty detailed so I'm just quickly showing you due to time limitation I won't be going to it you can see government official official head of states PM Senate members MPAs MN ACMs public office
01:32:30
holders bureaucrats judiciary etc they are even local government officials they are all excluded from their bid of this secondly a public listed company would not be able to avail the amnesty so a builder and developer can be a private limited company not a public company if the public funds are involved you cannot avail this amnesty a real estate investment trust or a company whose income is exempt under any other
01:33:03
provision of the ordinance would not be able to avail this amnesty and any proceeds drived from the commission of a criminal offense including the crimes of money laundering extortion or terror financing would not be able to avail this amnesty flat straight off addressing the concerns of fa tf2 however an important exclusion any offences under this ordinance the text ordinance are excluded mean if somebody did not do
01:33:36
money laundering extortion or terror finances but otherwise didn't declare dead mist acceleration or did not probably pay their entire tax liability they can avail that amnesty so it's a considered pro and con while money laundering extortion tariff financing are excluded and he takes a misdeed which is the right of the national government is being forgiven in the hopes of reviving the economy a by way
01:34:08
of the construction sector this brings us to the miscellaneous requirements and conditions and we are nearing the end of the session so let's just finish this and I'll take your question Emma in one go at the end so some other miscellaneous requirements and conditions are that naturally when you are giving so many incentives you are giving fixed x-rayed you are giving
01:34:39
amnesty you are giving industrial industry status and the benefits that apply especially for the import of plant and machinery and you are also given relief in terms of capital gain tax you are giving relief to buyers first-time buyers to builders developers etcetera then national naturally no tax credit will be allowed however any takes under to section 236 K you do remember what is
01:35:09
236 K don't you 230 6k deals with the advanced exon purchase or property any dad text which has paid the tax credit for that would be allowed other than that no tax credit would be allowed and no refund adjustment for previous AO years against the tax liability under this ordinance would be available and will tax liability would be computed by using the formula shown on your screen text liability as per the rates mentioned in rule 10 divided by the
01:35:42
estimated project life in years the estimated project life for Texas will not exceed two and a half years for new projects for existing projects from texia 2020 through to texia 2022 the taxpayer would need to reduce the pests by the percentage of completion up to the last day of the accounting period pertaining to texier 2019 as declared in registration form this is very logical any part of the project that was
01:36:14
completed till the last X here 2019 would need to be taken out because that would not fall within the scope of this ordinance and the text liability of texia 2020 would need to be paid along with the text written for this year the text computed above shall be paid in advance in four equal installments in on quarterly basis in the manner laid out in Section 140 seven of the income-tax ordinance 2001 the builders and developers and
01:36:45
first-time buyers as we have discussed in this presentation and today's session would be able to get their project registered under this scheme voluntarily so they can choose to avail this scheme they can choose to be text under the this new scheme and under the section hundred D that could be inserted voluntarily they can also choose not to do that and B text under the existing regime if they do choose however to
01:37:17
register under this scheme it can't be reversed so you have to think the benefits if you think it's beneficial amnesty fixed ex everything all the incentives I would really believe or people who think it's not beneficial anyway if somebody does think it's beneficial and get registered once registered it can't be reversed the builders and developers will register each project each project separately by submitting the online form that FBR would release on iris by providing the details of the
01:37:50
project in case of undertaking of both the development development and construction project on the same plot two separate forms will be submitted for both development and building the registration can be done till 31st of December 2020 and new and existing projects should be completed by 30th of September 2022 now we have tried to
01:38:20
cover all the important points but as you can understand there are so many questions there are so many areas there would still be some things some my new points that might be left out that's why we have given you the complete text laws amendment ordinance that you can refer to and go through in your free time we are also gifting you a copy of this presentation but please be professional and ethical and do give credit to
01:38:51
today's session to ACCA to FBR to ml/cc when you refer to this and make use though of this and any questions that you have you'll be able to ask me not just now but even after this session you can contact me on my details provided to you and the best way to contact me would be on my LinkedIn profile that is available on screens you can just click on this it's in the profile in the presentation you have the profile and just send me a message
01:39:23
connect with me on LinkedIn and send me a message and I will get back to you if you do decide to send me a message on whatsapp please introduce yourself and remember I get a lot of whatsapp and email so it might take a bit of time to get back to you the best way or to get a quick comparatively quicker responses on LinkedIn but the best thing is I do respond even if it takes time I respond to everyone um another fantastic endeavor that we are doing is or you are
01:39:55
getting this interactive session you are getting to ask the question and everything but even if you want to see the recording otherwise this will be available after quarter on a CCS GoToWebinar but it would be available within a few days on my youtube channel too you can access that and another good thing we envisioned a program that we referred turned the corona or kovat 19
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lockdown into a blessing by professional development we delivered several CPD's and last few days life for ACCA we also started putting up these sessions free of course for everyone on the YouTube channel as well as many other sessions and trainings and many other professional development clips on the YouTube channel and in the last few days alone over 5000 professionals have a
01:40:59
build this in this month over last few days they have benefited from this program by either attending the CPD's online or going to the videos on the YouTube channel and now we have decided to expand the program further by launching a new you video on the YouTube every single day so every single day you'll be getting a new professional video on the YouTube and taking in your feedback we
01:41:29
have reduced the duration so for tomorrow and day after tomorrow they are still longer sessions but from first year onwards the sessions would be anywhere between a few minutes to a maximum of 30 minutes they would not go more than 30 minutes they would become sessions in part if the topic is length here but every video uploaded would be a maximum of 30 minutes to Benny for the benefit of viewers so they can see this
01:42:00
at their comfort at their comfort and with that smaller time period hopefully they would have better retention and engagement so this is the YouTube channel link to you will have that you can click this and open the YouTube channel otherwise you can simply go on YouTube and search it by my name boomers a here Mir and you'll have the YouTube available to you so with this I think this is the this is now time to go to
01:42:31
the Q&A are you ready Nizam you while Nizam is coming let me quickly show you the YouTube channel so we have Nizam but just give me 30 seconds Nizam so this is the YouTube channel the way you can search it is already shown in this video clip here you'll just type in my name who mirza here meet and it would appear and you'll have all these ACCA CPD session as well as a new
01:43:05
professional development video every single day so make use of this this time period this lockdown and invest in yourself over to you Nizam let's go through with the question what you need to do now in Assam is quickly ask me the question I would I might add and ask you to unmute our guy or two but otherwise we'll try to quickly go through as many questions as possible any question relating to what we have already covered you can skip that on your own or you can
01:43:36
just quickly read the question and I'll skip it for you so let's start my friend you you'd like to tell me the last question when I was born it was good I just started by why don't you ask the question that Taha askary asked it's a couple of question after rubbish jumps you'll be looking at 3:20 ish 3 2000 around that time ok so rubbish answers
01:44:12
question rubbish shams one I already answered just scroll down a little bit let me answer one question while you would think I was on hang on I promised Moni be a fan cheffy to answer his question he said while a want amnesty scheme and be encouraging money washing I hope many of your question is now answered I covered in detail the exemptions please carry on Nizam tossed grease question 331 okay so no questions at 3:31 at my and
01:44:46
let me ask this question and you can then become the next one Taha scree are thank you you're welcome Tahara the scariest daddy present incentives being provided seems to be a short term a year to scale economic growth in the present environment as you have already discussed thanks to her I went to a leading economists point of views on Pakistan having the lowest productive utilization of land in South Asia let alone the
01:45:18
world a lot of it is happening due to ineffective regulation and influx of black money what mechanism do you think should be employed by the authorities to spur economic development for long term in the construction industry a very good question Taha and it would require a detailed session I'll try to do that if you especially putting me a reminder on LinkedIn but just a few pointers the first stage is the economic revival checks and balances have been introduced exclusions have been introduced the next
01:45:50
stage would be the documentation of the economy along with structural reforms of the legislation specially tax laws so people can gain the confidence and then actual delivery so people can see that their tax money is being spent so avoidance of harassment and winning over people's trust once that is done then there can be an effective documentation of the economy and implementation of the AML regimes most effectively but let me tell you Pakistan has done fantastic
01:46:21
work I can tell you this because I've been working as advisor and trainer with several bank and the AML laws implementation has been fantastic we have even drafted the ml loss for some banks and the kind of efforts that stated Bank has put in let me tell you they are one of the best in the region so hopefully we'll continue efforts in this regard and see the results in the coming time period Sahasra also asked at
01:46:52
3:33 is there no possibility of applying a single unit of text throughout the cycle of construction which includes land plotting completion or building and capital gain from the first sale is the no internal precedence of it the Hut the fixture it has now been introduced and we have discussed I hope that answers your question if you are asking something else please elaborate or send me a message on the LinkedIn over to you 334 thank you you're so Shabbos McCune exemption from capital gain is available
01:47:24
to everyone or rather than only builders and developers Shabazz we have covered that in detail if the requirements are met by the first time purchaser that our sorry by the purchase seller that the property they purchased was the one that which they are about to sell and it was being used for their own personal accommodation and all the other conditions including the benefit not being avail previously was being met then that's then yes they will
01:47:56
be able to avail the CGT exemption if you have contact you are welcome over to you another question by Shabazz Muhammad holding of tax on dividends of construction companies is made that space will have to pay tax on dividends themselves am i right very good question Shabazz a reread this slide that I provided you in fact you'll have to go through the legislation the dividends that are being paid exemption
01:48:33
has been made there so these dividends will be received takes exempt so the way dividends are texts the withholding taxes deducted the same concept like you receive salary income the text is already deducted if the government says okay it's exempted you don't have to get all the celery texts it doesn't mean you have to pay the text yourself I hope that answers the question next one so good news for you thank you you welcome
01:49:04
a Emeth book free my question is relating to the whi T for construction contractors I understand that this will remain same for the construction contractors and they will deduct HIIT as they are deducting now not really Emma I've discussed this in detail as per the changes made in section one five zero or 1 5 3 the video of this will be available within this week in fact next few days on the YouTube channel please
01:49:37
go there subscribe to it or watch it for the answer but no it won't be the same changes have been introduced in section 150 and 1 5 3 and it's not whi t my friend it's wh t the abbreviation for withholding text over to you Nizam thank you a shake ivana then he also explained what is the benefit of this audience of land owner foot purchase and constructed the house
01:50:10
or Plaza or housing society from builder and developer this scheme only covered only builders or developers and he also goes on for maybe you should also this first could you please unmute Asha Kelly Rana Saab Asha Kelly ran a Saab is the vice president of Lahore Tech's Bar Association as I mentioned in the session he is one of our partners Lahore Tech's bar is a partner institution of
01:50:40
ACCA and we work very closely we have lot of mo use and our Sheikh Sabah is a very Leonard professional and also esteemed official of the Lahore Tech's Bar Association but on a personal level a very dear friend could you please unmute our shakes up so he can ask his question himself you so himself allows you to unmute yourself you are included at my end slowly Khun
01:51:14
are you moving walaikum asalam I shake very good to have you here welcome how are you how's that session going so far I am very happy to see you and this actually is very knowledgeable and sharing your valuable knowledge for us I really appreciate you I proud of you thank you I can also request to make this session another both for the members of the howtechs Bar Association
01:51:43
once again sure because this is a new audience thank you very much thank you so kind of you welcome carry on thank you I'll just discuss the question you have asked thanks for your kind words and compliments our Sheikh Sabah is a very positive person and as you have seen right now not only he appreciated the effort but he immediately thought of benefiting the members and asked to do the session for the heart X bar again which are shakes up on your request will be doing so the
01:52:17
credit would go to you you ask that Bengal you are welcome you asked that kindly also explain what is the benefit of this ordinance of land on earth for purchase and construction of the house or Plaza or housing society but from builder and well per the scheme only covered builder or welfare I should by anybody who would be building or developing when they'll register themselves with the FBR would become builder and welfare because the ordinance defines the builder and well
01:52:48
but not in the typical sense but as someone who would register their project with the fpr on iris so for example you or me went and bought some land and we decided after buying the land we decided that we are gonna build a property on it so what we would need to do is we'll register ourselves on iris and we would become a builder if we just buy some agriculture or undeveloped land and we decide that
01:53:18
we'll develop and sell it as a housing society then we'll need to register ourselves on fpr's website iris and will become dwell per so it's not limited in the traditional sense to traditional builders and well pers but it has now opened up there and we knew to anyone willing to work in the construction industry they can become builder and well / by just in rolling themselves on FBR and there is no limit they might be building just one house just one unit they can do that there is no size limit
01:53:50
so hope that answers your question sir should I move on sir let's do that okay so I think this one is for you face anima the tower link is not selling selecting then moment it chose so relief is only available on import of mountain machinery what about material like tiles electric items etc we have discussed that there would be no withholding tax deducted on any materials bearing cement and steel
01:54:29
it's covered in the session for more detailed discussion please do view the recording of this session I have already shared the link of the YouTube channel with you I've also shown it to you it would be available within a few days within this week so please visit that I look at the recording you'll get your detailed answer otherwise go through this presentation meanwhile next one you all right so Amador Redmond
01:55:05
what can we expect from upcoming relief package from for SME sector what would would you kindly give your input it's a very good question and one that would retire require some detailed answer how meets up I mean so basically the upcoming relief package for SME sector is still to be seen that what transpires a lot of people were asking me to comment on this relief package for construction industry but I was holding
01:55:36
myself back reason being that as professionals we should wait for the formal document to be released because many things actually get changed during the process of approval by the cabinet or if it's presented to the Parliament during the debates there or through the promulgation so once the final thing is available only then one would be able to comment on this so I would suggest let's hold and see what the final package is before we actually comment I hope that answers your question now Nizam could
01:56:08
you continue reading the comments as I think we have answered more of most of the question so you can start by reading ashik by his comment that is act 355 all right I'll be apologizing but I wasn't around and it's not coming here at my end okay that's fine I'll just read the comments myself and then you can connect from there you were available so a ship
01:56:44
I said hello how are you and we already discussed that I'm very well my friend and I hope you are well - thank you for such a fruitful not lid sharing session with us and sparing your valuable time I'm proud of you you are most welcome we are glad that a knowledgeable person like you also found this valuable and thanks for your kind feedback we look forward to strengthening our ties with law takes part and we will be doing this session for the heart x part 2 [Music]
01:57:13
next up is Kemal Ali 4:17 is that appearing to you Nizam yes it is would you like me to speak it out sure you are the team continue please thank you sir the biggest fan but I am suggesting to organize these sessions in evening timings as you were doing earlier I could not concentrate due to office work in this time so Komal I have just a
01:57:47
small import for you we are organizing all these webinars on a schedule that is based only so we had a session that was postponed due to lack of time it was based on international Chamber of Commerce running from Sri Lanka so it was a last moment called or it would have been on here but due to clash of
01:58:18
time we couldn't put it up so back-to-back webinars and we have to really push in all these sessions West is that's okay assured let me address that Thank You Camille first of all thank you for such a kind feedback well biggest fan then I would be your biggest fan that would look forward to meeting you as Nizam has dual UV
01:58:49
normally try to organize these in the evening time but we have already had as a sub session planned in these few days and we wanted to do it very quickly for the benefit of our members and other attendees and our partner institutions so the ordinance released only yesterday and we wanted to do it today and we did it and I actually worked overnight to finalize the presentation for you guys but the problem was the sessions were
01:59:20
already scheduled for the for today so we worked with the team and they worked very hard to organize the back-to-back session at the only slot that we had was 2:30 to 4:30 so we said instead of delaying let's do it at this time however to compensate you we will be making available the recording of this session online it would be available within this week in the next few days on the YouTube channel so don't worry my friend you'll be able to see the recording and as usual if you
01:59:51
have any questions you can contact me on LinkedIn I hope that answers your question next one over to Eunice on thank you so homey - Ramon so what can we expect from the upcoming pitch for the SMC the wheeled Ibraheem thank you more by for your face in time you are most welcome Nabil and we are glad you attended after you read the command give me a few seconds to respond to them - as a courtesy
02:00:23
thank you will be followed like that most facile really informative informative session thanks mr. Omer Zaheer and ACCA you are most welcome special sub we are glad that it added value and that sorry okay so Sasha kaun Ivana when I registered the company after my work done then what will I do can it can it will be wind up or dissolved so a ship ie if you register company for a project as a builder and
02:00:58
dwell per after that is completed you can always wind up that is covered within the scope of the Companies Act 2017 however you don't even need to register one you can even do the project as an individual on your own in NPN or you can do it as a part a of P in partnership with someone but to answer your question if you decide to do that as a company after completion of the project you can wind that up and that is covered within the scope of the Companies Act 2070 of that answers your
02:01:29
question over to unisza COO sir - al Majid okay I'm a missing element um comida Ramon thank you for the input so really helpful core bless you you are most welcome god bless you too my friend Deshawn Majeed server session it was really helpful you are most welcome session we are glad it added value Gesser muchif
02:02:01
unable to download notes so I just shared the all the handout links then custom widget further text message should be started which I rate alerts regarding the start of the okay it's a good suggestion to all of us do have our cell phones handy and our emails are normally on our cell phone and we are getting updates about them so if we are getting so many emails that we can't
02:02:32
locate this email then the question would be perhaps we might be getting so many SMS that we won't be able to locate the SMS too something to think about but still a good suggestion and nizam please discuss that bit member affairs I will say or chicolini rana thanks for compliments and holler best of luck in future you are most welcome a shiksa thank you very much best wishes to you too and will soon be doing the session as you have personally
02:03:04
requested for our esteemed partners of law or taxpayer Association inshallah in command alley sure sir it will be a pleasure to meet you thank you so much I will go through the recordings you are most welcome the pleasure would be mine Kemal the last sake bility for wonderful inside great session thank you very much Sahib sob and I think let's call it a day now thank you everyone for attending the session today
02:03:39
we hope you learn from today's session and it added value thank you for sparing that time thank you for all your great feedback please do connect on social media lecture suggestion comma in let us know what kind of topics you would like to have sessions in future too and do subscribe to the YouTube channel to avail the free recordings of this session for your benefit too and most importantly stay safe follow all the
02:04:09
precautions do the best you can and use this time widely wisely to invest in your professional development so that when you come out of the lockdown and even during you are a different person able to cope with the challenges that that I would like to thank my entire team at ACC in his arm Arun everyone who made today's session possible Sajid who was also very excited for today's session our partners who really
02:04:40
spurred us off for this session lahore chamber of commerce and industry especially cash - wassup there lahore Tech's Bar Association especially ashika Liriano's up there our members our tax advisory committee rmnp my own team at ml/cc millennium law and corporate company you really helped with this presentation and all the material and really put up with me taking all the time out from the firm's work for the
02:05:10
greater good so I think that's it once again thank you very much for your time have a good day and take care of yourself till we see you the next time Allah Hafiz

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