Islamabad Capital Territory

Islamabad | ReNews Pakistan
The government’s plan to privatise the Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO) and Islamabad Electric Supply Company (IESCO) is facing significant concerns from prospective investors, prompting the authorities to offer further assurances and policy clarifications.
According to sources, investors have raised detailed questions regarding the mechanism for determining electricity tariffs, the regulatory powers of the National Electric Power Regulatory Authority, possible government interference after privatisation, continuity of official policies, permission for self-generation of electricity and the level of operational independence to be granted to the companies.
They have maintained that investment worth billions of rupees would remain difficult without clear regulations, predictable policies and a stable regulatory environment.
The government has proposed transferring between 51 and 100 percent of the shares in the three power distribution companies, along with management control, to private investors.
Together, the three distribution companies supply electricity to more than 14 million consumers across major industrial, commercial and urban centres in Punjab and Islamabad. They are generally regarded as being among Pakistan’s comparatively better-performing electricity distribution companies.
The Privatisation Commission has organised roadshows in Türkiye, Saudi Arabia, China and several Pakistani cities to attract prospective investors.
During these engagements, officials held meetings with more than 30 local business groups and 23 international investors. Separate presentations were also reportedly made to 11 major business groups in Türkiye.
At the request of interested investors, the government also extended the deadline for submitting expressions of interest for FESCO and GEPCO, allowing prospective bidders additional time to complete their internal due diligence and financial assessments.
The Privatisation Commission has not yet officially disclosed the names of the investors or companies that have expressed interest in the process.
Officials have only indicated that the prospective investors include local business groups as well as international parties from Türkiye, Saudi Arabia, China and other countries.

Islamabad | ReNews Pakistan
The government has prepared a comprehensive special package to revive the real estate sector and boost investment, which is expected to be launched next month. According to sources, the package aims to attract overseas Pakistanis and foreign investors to invest in Pakistan, particularly in light of the current regional situation. Under the proposed package, significant incentives are planned for overseas Pakistanis, including the waiver of Federal Excise Duty on property purchases and tax concessions. Additionally, further relief will be provided to tax filers, while non-filers will face stricter measures.
To support the housing sector, the government has also proposed introducing a fixed 5% markup on home financing up to PKR 10 million, which is expected to make homeownership more accessible for the middle class.
The package also emphasizes introducing modern financial systems, including escrow accounts, to ensure secure and transparent transactions between buyers and sellers. Under this system, payments will only be released once both parties have fulfilled their obligations. Furthermore, a Gulf-style regulatory model for the real estate market is under consideration, which would require registration of developers and agents, ensure timely project completion, and protect buyers’ rights.
Sources indicate that the government is also considering establishing Special Investment Zones and Real Estate Investment Trusts to encourage investment in dollars. The proposals have been submitted to the relevant authorities for final approval, and it is likely that additional measures for the sector will also be introduced in the upcoming budget.

Islamabad | ReNews Pakistan
The Islamabad High Court (IHC) has ruled that profits earned from the sale of immovable property must be taxed under capital gains provisions of the Income Tax Ordinance, 2001, and not as business income.
In a detailed judgement, the court held that Section 37(1A), which specifically deals with taxation of capital gains on immovable property, takes precedence over the general provisions governing business income under Section 18. The court observed that even if a taxpayer is involved in property-related activities, the specific legal provision would still apply for taxing such gains.
The ruling was issued in a reference application challenging a decision of the Appellate Tribunal Inland Revenue (ATIR), which had earlier classified the proceeds from property sales as business income, endorsing the tax authorities’ stance. The case involved an individual taxpayer who had declared capital gains of Rs20.18 million for the tax year 2015. However, following an audit, tax authorities reclassified the amount as business income and issued notices accordingly.
During the hearing, the taxpayer contended that he was not engaged in the business of buying and selling property. He argued that his declared business income stemmed from agricultural activities, including the sale of crops, trees, and livestock on his land. The high court noted that Section 37(1A) is a special provision exclusively governing gains from the disposal of immovable property and, therefore, overrides general provisions related to business income. It further clarified that the applicability of this section does not depend on whether the transaction is part of a business activity. The judgement also stated that amendments introduced through the Finance Act, 2021, regarding taxation of cooperative societies in property transactions were not applicable in this case, as the taxpayer was an individual.
Setting aside the tribunal’s decision, the IHC concluded that the lower forums had misapplied the law and reaffirmed that gains from the sale of immovable property must be taxed strictly under Section 37(1A) of the Income Tax Ordinance, 2001.