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July 6, 2018

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Non-filers await FBR nod to own vehicles below 1,000cc

KARACHI: Punjab Excise and Taxation department is awaiting a written confirmation from the authorities to register new or imported vehicles below 1,000cc on the name of non-filers of tax returns, The News learnt on Thursday.

The Commissioner of Income Tax, Regional Tax Office-II, Lahore, in a recent meeting with the officials of Directorate of Excise and Taxation, Lahore, agreed to the registration and transfer of new vehicles below 1,000cc on the name of non-filers, director of Excise and Taxation, Lahore said in a letter.

“However, written clarification from FBR (Federal Board of Revenue) is still awaited,” the director added.

The last government, through Finance Act 2018, banned registration or transfer of new vehicles on the name of non-filers.

“Any application for booking, registration or purchase of a new locally-manufactured motor vehicle or for registration of an imported vehicle shall not be accepted or processed by any vehicle registration authority of Excise and Taxation Department or a manufacturer of a motor vehicle respectively, unless the person is filer,” the amendment into the Income Tax Ordinance 2001 said. The objective is to expand tax base. Total number of return filers for 2017 increased to 1.38 million till May 6 as compared to 1.14 million a year ago.

Number of return filers for the tax year 2016, up to February 28, stood at 1.42 million. Officials said number of return filers increased owing to initiatives unveiled in budget 2018/19 to curb tax evasion.

The director of excise and taxation department said the meeting agreed that there is no requirement of filer for registration or transfer of motorcycles, commercial vehicles and cars below 1,000cc.

Analyst Syed Daniyal at Topline Securities said the notification is contrary to the reports that the restriction is across the board.

Daniyal said approximately 30 percent of locally-manufactured passenger cars are of below 1,000cc, all of which are sold by Pak Suzuki Motors. Annual sales of automobiles are around 250,000 per annum, which means sales of nearly 75,000 vehicles would be unhurt, but large segment is above 1,000cc, which might get a blow following the new regulation of the government.

Analyst Arsalan Hanif at Arif Habib Limited said the FBR is expected to issue the clarification in the next few days.

“Excise and Taxation authority in Punjab has already allowed non-filers to buy new cars / motorcycles having capacity of 1,000cc.”

Mohammad Sabir Sheikh, chairman Pakistan Motorcycles Dealers Association said there is confusion in the market.

Sheikh said motorcycles cater to middle-income segment and to promote the buying of two-wheelers the government should relax duty and other tax structure to cut prices.

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