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Provinces not to support raise in withholding tax on vehicles

Provinces not to support raise in withholding tax on vehicles

KARACHI: Provinces have informed federation about the drawbacks of amendment to tax laws for transfer, registration and transportation of motor vehicles without consensus with them. The alteration in withholding tax for vehicles from the federation is increasing problems and decreasing the revenue collection of Excise, Taxation and Anti Narcotics department.

People will be reluctant in transferring their vehicles and will prefer to use open letter due to increment in withholding tax ratio, this will cause problems for the authorities responsible for peace and security to identify the real owners of vehicles. Furthermore annual motor vehicle tax along with increased advance tax will raise the number of tax defaulters which will result in heavy loss in terms of revenue collection.

Federation was told that it is not possible for Excise and Taxation department and motor vehicle registration authorities to categorize tax payers and defaulters on basis of CNIC as the old database is not made on these bases so the old registered vehicles have no data relevant to CNIC.

FBR official said that provinces have reservations about the issue and we are considering to adopt an acceptable way for both.