Non-filers might not be able to purchase new cars

The government of Pakistan has announced the budget 2018-19 three days back in the National Assembly of Pakistan, and it marked government’s sixth-budget while being in power. The 2018-19 fiscal year budget was announced by the newly inducted Finance Minister Dr. Miftah Ismail. The government has proposed many incentives for almost every sector of the country including automobile industry.

In this particular-write up we will be focusing on the point that non-filers will not be allowed to buy a vehicle. The government has proposed this in the parliament, which has led to the discussion in the automobile sector.

According to our research and media reports, the government will not allow non-filers to buy a new motor vehicle manufactured locally or imported until they file income tax return. It is to be noted here that this was proposed by the government and will be discussed in the parliament and once finalized then non-filer will not be able to buy new cars.

Read Also: Budget 2018-19: Government proposes reduction in customs duty on electric cars

Before compiling the story, we contacted a government official and he said that the step taken by the government is to encourage people/non-filers to file income tax return, which will increase the revenue of the government, he further added.

According to the official, 1.26 million tax returns were filed last year. That’s why this step has been taken to increase the tax collection, the official asserted. Furthermore, it was also revealed to us that non-filers cannot purchase property over PKR 40 lac.

One important thing to mention here is that in CCP’s open hearing on competition issues in automobile sector many automobile consumers complained and argued that government is not giving good incentives to people who are tax filers. The government should give us some leverage and compensations, they reiterated in the open hearing. This might also be one of the reasons government has proposed this initiative to curb the concerns of filers.

However, industry analysts said that the step proposed by the government is haphazard and might not get the green signal in the first place. Also, due to this premium on cars might also rise in the industry, the analysts said.

Moving onward, the government has also proposed the reduction of customs duty on import of firefighting vehicles from 30% to 10%.

Let us know your thoughts in the comments section below.

My name is M. Ali Laghari and I love to read and write about Cars.

Notable Replies

  1. Official Source / reference from the budget speech may be provided. I have read the whole budget speech but could not find this issue that non-filers will not be able to purchase new / Imported Vehicles.
    Secondly, 40 Lac PKR cap for non-filers is for property only (and not for automobiles)!
    Please confirm, and correct me if I am wrong.

  2. aa78 says:

    Good step which makes sense so long as proper exemptions are given for exceptional cases like old citizens and widows, etc. Same should apply for all sale/purchase of old/used cars and all types of transportation.

    Reduction in auto sales is not a big concern since assemblers already lack the capacity to deliver cars within 2 months as mandated by the Auto policy. If they can't scale up their production, better to scale down their sales to bring them in line with the policy and benefit the customer.

    It wouldn't hurt to have earlier delivery of car.

    Too bad the Japanese assembler mafia will just bribe the baboos and their contacts in relevant ministries to prevent this from being implemented. I sincerely hope FBR takes a tough stance on this and refuses to budge under pressure.

  3. Ok. As per this link, this thing was mentioned in Finance Bill 2018 (which I didn't read) and not in the budget speech.
    Thank you very much for sharing the source of information.
    Jazak ALLAH and stay Blessed Brother! :blush:

  4. Even if this is true, we have to be realistic. This will hardly effect middle to upper middle class as even if they are being generous the max they get is a car with price max Rs. 20 lacs / 2 million (aka Cow-Rolla).

    And as for the feudal / politicians, their cars/plots are already in other relatives names (except for a few who might not have trust worthy relatives)

    The govt already gets taxes in the form of advance income tax and withholding taxes that sooo many non-filers pay. Still the national kitty (Quomi Khazana) is always empty ? Where is the money going ?

  5. I don't think there is a cap of 40 lacs on cars. As per media reports, this is only for property where non-filers can buy real estate worth upto PKR 40 lacs. However it has been mentioned that non-filers cannot purchase a new car, whether locally assembled or fresh imports, irrespective of their amount.

    I fail to understand how premium on cars might rise due to this? If it is implemented, both the delivery times and premium on new cars will instead fall drastically instead of rising as demand of new cars will only be from filers that are very limited. Non-filers will only have to buy used cars, after it is registered by a filer. Filers will benefit a lot from this as they would get cars even within a couple of month.

    Car manufacturers of course will be significantly impacted from this and they must already be lobbying against this.Given their massive clout/influence in Govt ministries (and their pockets), I don't think it will be passed as a law, but keeping my fingers crossed.

    P.S: Just to clarify a post above me, you don't have to have an income to be a filer. All you need to do is to file your returns and wealth statement in FBR portal so that the wealth you have is documented and is not counted as black money.

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