Tax collection hikes by 35% for new vehicles’ registration

Income tax collection has surged by 35% due to the registration of new cars during the last seven months of the current fiscal year (July-Jan), reports a local media outlet.

This has caught many analysts by surprise due to the fact that non-filers are barred from purchasing new cars. The collection of advance tax from the production of new vehicles has surged to Rs.679 million in the said period as against Rs.503 million. While speaking to the media, a few industry experts asserted that the rise in the collection of advance tax is due to many reasons, one being the increasing demand for cars used in ride-hailing services. 

It is pertinent to mention here that the said tax has been acquired from car makers registered with Large Taxpayers Unit (LTU) Karachi. The authorities are expecting a rise in the collection as the government has allowed non-filers to purchase cars up to engine capacity of 1300cc.

Read Also: Islamabad local government to revive toll plazas

The government through Finance Supplementary (Second Amendment) Bill, 2019 has made changes in the policies devised by the previous government. Aside from the increase in the collection of tax due to the registration of new cars, several other authorities in the country are also trying to increase their revenue as well. Metropolitan Corporation Islamabad (MCI) is one such example. The authority has decided to revive the toll plazas at the entry and exit points of Islamabad to increase revenue. The funds will be used to carry out civic duties in the city.

Additionally, the federal government has also abolished toll tax incentive given to ministers and senators and now they, too, like the general public, will pay toll tax.

Related Content: Federal Board of Revenue scrapes customs duty on auto parts

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