Tax on registration of vehicles above 2000cc jacked up

ISLAMABAD: The government has jacked up income tax on registration of vehicles above 2000cc and also increased tax rates on higher income brackets of salaried and non-salaried classes under the IMF demands.

On the eve of the budget for 2023-24, there was no increase in tax rates for registration of vehicles and higher income brackets for salaried and non-salaried class. But in order to revive the IMF programme, the government had to undertake additional taxation measures to fetch more Rs215 billion in the national kitty.

So all those avenues were found where the rates could be identified for bringing additional revenues but the government did not bother to find out those who were already out of tax net.

According to the amended Finance Bill 2023-24 approved by the parliament on Sunday, the government slapped fixed tax on imported and locally manufactured vehicles from 2001cc to above 3000cc.

The fixed rate of tax would be 6 percent of the value of a vehicle having engine capacity 2001cc to 2500cc. The fixed rate of tax would be 8 percent of the value of a vehicle with engine capacity of 2501cc to 3000cc.

The fixed rate of tax would be 10 percent of the value of a vehicle having engine capacity above 3000cc. The Finance Bill 2023-24 also approved jacking up tax rates for higher income brackets of salaried and non-salaried classes in the budget.

The tax rate remained unchanged for salaried individuals where taxable income exceeds Rs1,200,000 but does not exceed Rs2,400,000. The rate of tax would remain at Rs15,000 + 12.5 percent of the amount exceeding Rs1,200,000.

Where taxable income exceeds Rs2,400,000 but does not exceed Rs3,600,000, the rate of tax would be Rs165,000 + 22.5 percent of the amount exceeding Rs2,400,000.

Where taxable income exceeds Rs3,600,000 but does not exceed Rs6,000,000, the rate of tax would be Rs405,000 + 27.5 percent of the amount exceeding Rs3,600,000.

Where taxable income exceeds Rs6,000,000, the rate of tax would be Rs1,095,000 plus 35 percent of the amount exceeding Rs6,000,000.

The amended Finance Bill 2023 has also increased income tax on the income of individuals and association of persons (AOPs) except a salaried individual.

The revised slabs for the individuals/AOPs revealed that where taxable income exceeds Rs600,000 but does not exceed Rs800,000, the rate of tax would be 7.5 percent of the amount exceeding Rs 600,000.

Where taxable income exceeds Rs800,000 but does not exceed Rs1,200,000, the rate of tax would be Rs15,000 + 15 percent of the amount exceeding Rs800,000.

Where taxable income exceeds Rs1,200,000 but does not exceed Rs2,400,000, the rate of tax would be Rs75,000 + 20 percent of the amount exceeding Rs1,200,000.

Where taxable income exceeds Rs2,400,000 but does not exceed Rs3,000,000, the rate of tax would be Rs315,000 plus 25 percent of the amount exceeding Rs2,400,000.

Under the new slab, where taxable income exceeds Rs3,000,000 but does not exceed Rs4,000,000, the rate of tax would be Rs465,000 + 30 percent of the amount exceeding Rs3,000,000.

Where taxable income exceeds Rs4,000,000, the rate of tax would be Rs765,000 plus 35 percent of the amount exceeding Rs4,000,000.