Motor vehicles tax raises by 200% for non-filers

ISLAMABAD: The Federal Board of Revenue (FBR) has ramped up the tax on motor vehicles for those not on the Active Taxpayers List (ATL), upward by 200 per cent.

Non-filers will now pay a fixed tax of 18 per cent, 24 per cent, and 30 per cent of the value of motor vehicles having engine capacity of 2001cc to 2500cc, 2501cc to 3000cc and above 3000cc, respectively.

The move comes as the FBR announced an increase in the withholding tax rate for non-activate tax filers or those not on the ATL in a bid to increase the government’s revenue generation and encourage people to pay taxes.

According to a circular, for non-ATL persons, the rates have been increased by 200 per cent — 18 per cent, 24 per cent and 30 per cent.

However, for those on the ATL, the fixed amount of tax on motor vehicles has been replaced with the collection of tax at the rate of 6 per cent, 8 per cent and 10 per cent of the value of motor vehicle having engine capacity of 2001cc to 2500cc, 2501cc to 3000cc and above 3000cc respectively.

Moreover, the circular added that where engine capacity is not applicable.

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The value of the vehicle is Rs5,000,000 or more, “the rate of tax collectible will be 3 per cent of the import value, as increased by customs duty, sales tax and federal excise duty in case of imported vehicles or invoice value in case of locally manufactured or assembled vehicles.”

The circular also announced that non-ATL filers will be taxed Rs303 for a bank withdrawal of Rs50,500. Those withdrawing between Rs55,000-Rs75,000 will be taxed Rs450.

However, Pakistan’s government agencies and foreign diplomats will be exempted from these taxes.

Additionally, the circular announced that to discourage unnecessary outflow of foreign exchange reserves via credit/debit card transactions, “withholding tax rates have been increased from 1 per cent to 5 per cent for ATL persons and from 2 per cent to 10 per cent for non-ATL persons.”