JS body to suggest easy tax rules for real estate
AHM Mustafa Kamal, chairman of the Parliamentary Standing Committee on the Ministry of Finance, speaks at a seminar on REHAB Week at Dhaka Sheraton Hotel yesterday. Tanveerul Haque Probal (extreme right), president of REHAB, is also seen. The REHAB fair starts today.Photo: STAR
The Parliamentary Standing Committee on the Ministry of Finance will recommend that the government simplify VAT and tax rules to facilitate the housing sector growth, its chairman AHM Mustafa Kamal said yesterday.
“We do not earn too much revenue from the housing sector. But we want to facilitate the growth considering its contribution to the overall economy,” he told a seminar at Dhaka Sheraton Hotel.
“We hope we will be able to help you ease VAT and tax regime, he added.
Kamal's assurance followed a presentation on contribution of the real estate sector to national economy where it was said that unfavourable tax and VAT rules and lack of fiscal incentives remain impediments to the sector's growth.
Real Estate & Housing Association of Bangladesh (REHAB) organised the seminar where REHAB Vice President Md Abdur Rahim Khan presented a paper where he said the real estate and construction sector accounts for one-sixth of the gross domestic product.
The sector, which provides jobs to 25 lakh skilled and unskilled workers, also facilitates growth of various backward and forward linkage industries such as steel, cement, bricks, furniture, fittings and fixtures etc.
Organisers said contribution of the sector should be increased, as demands for housing would continue to grow with the rise in population, especially in Dhaka city.
However limited land in Dhaka city for private developers, lengthy approval of plans by regulator Rajuk, poor infrastructure and utility services, high interest rate for housing loan, rising land prices hurt the faster growth of the sector in Dhaka and outside.
“We are scared of land price. It leads to a rise in apartment price,” said Rahim.
The parliamentary body chief however pointed out that realtors are also partly responsible for the rise in land prices in Dhaka.
“Prices will rise if demand exceeds supply,” he said, suggesting realtors develop homes and satellite towns outside Dhaka. “You should build satellite towns outside the capital.”
Kamal said the growth prospect of real estate sector is high in Bangladesh and it could be tapped if entrepreneurs offer different products to potential homebuyers.
According to REHAB, non-resident Bangladeshi remitters, their families and businessmen, especially exporters, buy nearly 75 percent of apartments.
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