Monday, July 22, 2024

Massive Increase in Advance Tax on Vehicles Proposed

The Pakistan Business Council (PBC) has put forward a proposal to the Federal Board of Revenue (FBR) suggesting higher advance taxes on utility bills, real estate transactions, and luxury expenditures for non-filers.

Furthermore, the council recommends raising the annual advance income tax to 250,000 per year for owners of vehicles with an engine capacity of 2000cc and above who are non filers. Additionally, the council suggests increasing the advance income tax on car purchases for non-filers.

Engine capacityExisting taxProposed increased tax
1800cc -2000ccRs600,000Rs2,000,000
2501cc-3000ccRs1,200,000 Rs3,000,000
Above 3000ccRs1,500,000Rs 4,000,000

It also proposes raising the advance income tax on the sale of vehicles (2001cc and above) by non-filers before registration (own money) from Rs1,200,000 to Rs2,400,000. Currently, a 7.5% advance tax is collected from non-filers with monthly utility bills of Rs25,000 or more.

Moreover, the PBC also recommends imposing withholding tax on withdrawals exceeding Rs50,000 in a single day from the bank accounts of non-filers. The board also intends to increase the petroleum development levy from Rs50 to Rs60, aiming to collect Rs870 billion. The government’s objective is to raise non-tax income to Rs2.9 trillion.

Nevertheless, these proposed measures are part of the government’s plan to increase pensions by up to 30%, necessitating Rs780 billion in funding.

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