Wednesday, June 07, 2023

Proposal to hike advance income tax on vehicles for non-filers

A representational image of cars parked on the ground. — Canva
A representational image of cars parked on the ground. — Canva

ISLAMABAD: The Pakistan Business Council (PBC) has proposed the Federal Board of Revenue (FBR) impose higher advance taxes on utility bills, real estate transactions, and luxury expenditures of non-filers.

The council has argued that the annual advance income tax amount should be increased to 250,000/per year for owners of vehicles of 2000cc and above who are non-filers.

It further added that on the purchase of cars, advance income tax is levied on non-filers [under section 231B] as tabulated below, which should be increased as suggested below:

Engine capacityExisting taxProposed increased tax
1800cc -2000cc
Above 3000cc
Rs 4,000,000

Moreover, it suggested that advance income tax of Rs1,200,000 on the sale of vehicles [2001cc and above] by non-filers before registration [own money] should be increased to 2,400,000.

Advance tax at 7.5% is collected from domestic connections in the name of non-filers whose monthly bill is Rs25,000 or more.

Moreover, it suggested that withholding tax be imposed on withdrawals above Rs50,000 in a single day from the bank account of a non-filer.

Moreover, sources in the FBR told Geo News that the board has decided to increase the petroleum development levy from Rs50 to Rs60 after which it will be able to collect Rs870 billion. The government aims at increasing non-tax income to Rs2.9 trillion.

The sources said that with the aforementioned steps the government plans to increase the pensions by up to 30% for which it will need Rs780 billion.