The Real Estate and Housing Association of Bangladesh (REHAB) has demanded the provision of a long-term low interest fund in the proposed national budget for fiscal 2021-22 so that the country’s people can purchase their own homes on instalments equivalent to rent.
In a statement to the media issued , the trade body said there is scope to reduce registration costs in the local housing sector further when compared to other countries. The REHAB hopes that the government will implement this and other demands in the future.
REHAB believes that Bangladesh will go a long way towards achieving its goals by implementing a well-thought-out budget amid the ongoing Covid-19 pandemic. The association of real estate developers also welcomed the move to waive special tax and duty on various construction materials, such as rods, cement, and tiles, in the proposed budget.
At the same time, if the government continues to allow the use of undisclosed income for the purchase of flats and apartments, it will play a fruitful role in the sector and help increase internal resources, the REHAB statement observed.
According to government estimates, more than Tk 14,000 crore in undisclosed income has been legalised so far this fiscal year, from which the government has received about Tk 1,500 crore in revenue. This has played an effective role in reviving the economy amid the current crisis. “So, we firmly believe that if this policy continues, more money will be added to the mainstream economy, which will help increase revenues,” REHAB said in its statement.
Besides, the proposed budget has reduced corporate and annual turnover tax rates, which is very positive, it added. “We have been working relentlessly as a development partner of the government for a long time. In all, about 50 lakh manpower is involved in the entire construction sector while the backward linkage industries have kept our economy afloat,” it said.
According to the association, about Tk 100,000 crore is directly and indirectly deposited in the government treasury from the real estate sector every year by combining different sectors and sub-sectors. Therefore, special importance to this sector is well deserved, it added.
The real estate and housing sub-sector in recent years has emerged as a major one in the country. There are criticisms against the activities of some elements in this sub-sector. But it should be noted that no area of life in this country is devoid of charges of malpractices and irregularities.
In this situation, the housing and real estate operators can be credited, on the whole, for meeting the needs of housing of various sections of people in society. Although the homes or apartments built and transferred to buyers benefit mainly the rich or the upper classes or middle classes, they are , nonetheless, contributing in a significant way to economic activities in the country.
The construction sector has proved to be one of the booming ones in the last decade and the present one . The share of the housing and real estate sub-sector in it has been a major one. Therefore, the suggestions conveyed to the government by REHAB merit an immediate and positive consideration and acting upon by the government before the coming fiscal year’s budget is final approved by the end of June.
The suggestions are mainly to withdraw or reduce temporarily existing duties and value added taxes (VAT) on all kinds of finished iron products and their raw materials. Such duty and tax exemption, as underlined by Rehab, would lead to a substantial fall in the prices of construction materials and hence a major slashing down of constructions costs. This, in turn, would breathe a new lease of life to this sub-sector which has been suffering from higher prices of construction materials particularly iron products. The Rehab is also asking for controls on the rising prices of cement, electrical materials, etc., which are also regarded as basic to construction activities. Perhaps the government can give due consideration to these requests when it finally adopts the budget for 2021-22 a week from now. Favourably acting upon Rehab’s proposals will benefit not only housing and real estate activities. The same should benefit the entire construction sector and the good effects of the same would also have spread effect on the economy.
There are many factors associated to a buoyant construction sector. A booming construction sector creates and sustains the demand for a wide range of commodities ranging from sanitary wares to paints and some services as well. A stagnating construction sector pulls down also growth or production of these goods and services. Besides, the direct negative effect of unemployment created due to job losses from dwindling construction activities, is also a cause for concern.
Considering all of these factors, the government would be acting prudently if it takes prompt action in relation to the suggestions put forward by REHAB.
