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business
Wednesday Dec 23 2020
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To meet FBR target, tax imposed on sale of new cars within 90 days of purchase

The logo of Federal Board of Revenue.
  • Tax will be imposed on sale of new cars within 90 days of purchase 
  • The decision has been taken to meet the tax target set for the FBR by the government
  • Tax being introduced to discourage trading of cars, says FBR

ISLAMABAD: The Federal Board of Revenue has decided to impose taxes on the selling of new cars within 90 days of purchase to control ‘On Money’ practice, reported The News.

According to details, the government has decided to impose close to Rs200,000 additional withholding tax on the purchase of new cars.

“It is aimed at discouraging ‘On Money’ on cars,” a top official of FBR told the publication.

For 600 to 1000cc cars, there will be additional WHT of Rs50,000, while for 2000cc cars there will be Rs100,000 tax. While WHT of Rs 200,000 will be charged on any car above 2000cc.

Read more: Pakistan's active taxpayers list crosses 3m benchmark for the first time

“This is only to avoid selling cars before 90-day period,” the official said, adding that it was aimed at discouraging trading of cars.

However, sources told Geo News, that the decision has been taken to meet the tax target set for the FBR by the government. The tax has already been approved by the federal cabinet.

According to sources, the tax will come into effect from January 1, 2021, till June 30, 2021.