The Pakistan Business Council (PBC) has proposed that the Federal Board of Revenue (FBR) hike advance income tax on vehicles for non-filers. The proposal comes as the government is looking for ways to increase tax revenue.
Under the proposal, the advance income tax on vehicles for non-filers would be increased to 250,000/per year for owners of vehicles of 2000cc and above.
The advance income tax on the purchase of cars for non-filers would also be increased, as follows:
- Engine capacity: 1800cc -2000cc
- Existing tax: Rs600,000
- Proposed increased tax: Rs2,000,000
- Engine capacity: 2001cc-2500cc
- Existing tax: Rs900,000
- Proposed increased tax: Rs2,500,000
- Engine capacity: 2501cc-3000cc
- Existing tax: Rs1,200,000
- Proposed increased tax: Rs3,000,000
- Engine capacity: Above 3000cc
- Existing tax: Rs1,500,000
- Proposed increased tax: Rs 4,000,000
The PBC has also proposed that the advance income tax on the sale of vehicles by non-filers be increased to 2,400,000. The PBC argues that these increases are necessary to bring more people into the tax net and to increase tax revenue.
The government has not yet announced whether it will implement the PBC’s proposal. However, the proposal has been met with mixed reactions. Some people have welcomed the proposal, saying that it is necessary to bring more people into the tax net. Others have criticized the proposal, saying that it will unfairly burden low- and middle-income earners.
The government is expected to make a decision on the PBC’s proposal in the coming weeks.
Impact of the Proposal
The impact of the proposal to hike advance income tax on vehicles for non-filers is difficult to predict. However, it is likely that the proposal will have a significant impact on the automotive industry in Pakistan.
The proposal is likely to lead to a decrease in the demand for new vehicles, as people will be reluctant to pay higher taxes. This could lead to job losses in the automotive industry, as well as a decrease in government revenue from the sale of vehicle registration certificates.
The proposal is also likely to lead to an increase in the number of people who register their vehicles under someone else’s name, in order to avoid paying the higher taxes. This could lead to an increase in the number of fraudulent vehicle registrations, as well as a decrease in the government’s ability to track the ownership of vehicles.
The proposal to hike advance income tax on vehicles for non-filers is a controversial one. It is likely to have a significant impact on the automotive industry in Pakistan, and it is unclear whether the benefits of the proposal will outweigh the costs.
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