The Pakistani government has imposed a super tax of 10% on 13 major industries, including the construction sector. On the other hand, retailers of building materials have been subjected to a fixed tax of Rs. 3000 to Rs. 10000. In this blog post, we will discuss how Super Tax will impact the construction industry, especially the prices of cement and steel.
If you’re currently constructing or want to construct your own house, you should be aware that the majority of your expenditure will go toward the grey structure, which has two main components: cement and steel. So you should definitely read on to know how the new SUPER TAX will affect their prices and, as a result, the total cost of your dream home.
What is Super Tax and How will it affect these industries?
The term “Super Tax ” refers to a type of direct tax that is not an indirect tax, which means it’s an income tax. Previously, these businesses paid 29% tax, but now they must pay 33%. Because if a company or individual’s annual income exceeds 30 Crore, a 4% surcharge has been added to their tax.
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Will Super Tax increase Construction Prices
The answer is NO! The proposed Super Tax would not significantly impact cement and steel prices in Pakistan. The tax is levied on the previous year’s earnings (Year 2021-22), so businesses would not be able to pass on the increase to customers. Another reason is that this is only a one-time 10% tax on large-scale businesses for one year.
Additionally, other factors such as the increase in the dollar’s value against Pakistan’s currency or the cost of raw materials used in construction can have a greater impact on prices. As a result, the Super Tax is not expected to impact construction materials prices significantly.
[Also Read Impact of Budget 2022-23 On Pakistan’s Real Estate Sector]
Conclusion:
The Super Tax is a new tax that the government is implementing in order to raise revenue. The super tax is being implemented primarily due to pressure from the IMF and to address the ongoing balance of payments crisis. This tax will affect the corporate sector, which has long enjoyed subsidies and government handouts. However, this tax will not impact the prices of cement and steel, which will not affect the prices of construction materials.
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