Tax exemptions on REIT, collective investment schemes surge 209%

Shahnawaz AkhterWeb Editor

10th Jul, 2021. 05:45 pm
Tax exemptions on REIT, collective investment schemes surge 209%

KARACHI: The income tax exemptions granted to collective investment and Real Estate Investment Trust (REIT) schemes during the fiscal year 2020/21 registered a growth of 209 per cent to Rs16.17 billion, compared with Rs5.23 billion in 2019/20.

According to the official documents, the Federal Board of Revenue (FBR) allowed these exemptions against those schemes that are distributing more than 90 per cent of their incomes to the certificate holders/shareholders.
Sources said the tax exemption has been granted to such Real Estate Investment Trust schemes that are regulated by the Securities and Exchange Commission of Pakistan.

At present, the REIT schemes are allowed within the territorial limits of Islamabad, Rawalpindi, Karachi, Lahore, Peshawar, Quetta, or any other city, as may be approved by the SECP.

According to the SECP regulations, in the case of developmental REIT, the proposed construction period should not be more than five years and the same would be part of the business plan, offering documents and all relevant marketing materials.

The sources in the Federal Board of Revenue said collective schemes and REIT schemes were allowed through the Finance Act, 2008. However, the quantum of exempted amount is increasing significantly due to the recent enhanced activities in the construction sector.

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