KARACHI: Tax authorities are in talks with the provincial motor registration authorities to retrieve online data of vehicles buying and selling in an attempt to net the untaxed money and increase number of filers, officials said on Wednesday.
Officials said the FBR planned a ‘massive’ drive against the black money involved in the purchase of motor vehicles. “We are negotiating with the provincial authorities to access data of registration and transfer of motor vehicles,” said an official.
An official at the Regional Tax Office Karachi said the FBR is initially creating link with the database of Sindh Excise and Taxation Department for accessing the motor vehicles data on real-time basis.
Officials in the Sindh Excise department also confirmed that the discussions with the FBR are underway.
FBR chairman Muhammad Irshad, at a meeting, said the revenue body is engaged in discussions with the departments of all the four provinces to access the motor vehicle data.
Tax officials said the purpose of obtaining data is to identify the sources of payments made by individuals as well as increase the number of income tax return filers.
The officials said huge undocumented money is involved in the transactions of motor vehicles’ purchases. Various estimates said the undocumented economy in Pakistan is almost equal to the formal one.
Auto sales were recorded at 122,347 units during the first half of the current fiscal year, according to the Pakistan Automotive Manufacturers Association. Industry experts said the total annual sales are expected to increase to 0.5 million in the next five years.
FBR sources said the data obtained from provincial revenue authorities would include registration of both locally-manufactured automobiles and imported motor vehicles.
The FBR, through broadening of tax base drive, collected data of 975,771 transactions of the past three years from motor vehicle registration authorities of all the provinces.
The sources said the data provided by the registration authorities is not accurate, making it difficult for tax departments to take action.
The official said the real-time data sharing would lead to the collection of advance tax by the provincial tax authorities.
The FBR, through Finance Act 2015, introduced higher rate of withholding tax for non-filers of income tax returns at the time of registration or transfer of motor vehicles. Number of tax return filers is still on the lower side despite increase in car sales.
The FBR amended the tax laws in 2011 to make the return filing for persons with motor vehicles of engine capacity of 1,000 CC and above mandatory.