The Board of Directors decided to exempt Special Purpose Vehicles associated with Real Estate Investment Trusts (REITs) from income tax in accordance with the Tax Act (IV) Amendment Act 2021.

News sources has suggested that the government may limit the amount of agricultural income tax exemptions under the 2001 Income Tax Act.

The FBR may limit the definition of “agricultural income” under the Income Tax Ordinance 2001.

The suggestion is to limit the income tax exemption to farms only, and absent owners could be taxed.

Another proposal is to limit the income tax exemption to major food crops. However, no final decision was made to restrict the scope of the agricultural tax exemption.

7-8 REITs are currently under progress and the SECP may grant them registration as a REIT Management Corporation (RMC) to level the housing sector.

The FBR has already granted the REIT a corporate tax exemption to be extended to special purpose vehicles.

REIT reforms aim to move towards a disclosure-based release, provide the necessary support to grow real estate investment plans, lower barriers to market entry, and bring public-private partnership infrastructure projects into the REIT sector.

To reform the traditional REIT model, major reforms are proposed that allow REITs to be invested either directly in real estate or through investments in specific companies, the introduction of the concept of infrastructure projects based on PPP within the REIT, etc.

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