The finance budget 2019-2020 imposed news taxes on vehicles. Government increase the income tax and withholding tax on the registration of the vehicle and transferring of vehicles. The increasing of new taxes is just like a dropping bomb on the consumers. Consumers already depressed from the increasing price of vehicles in the country all the local auto manufacturers increase its product prices because of the devaluation of the rupee against the dollar. In this situation, the new taxes are dropping like a bomb on the consumers.
The updating tax passed in the finance budget 2019-2020 and the taxes imposed on the Registration of vehicles, annual token tax fee and transfer in this situation it’s very difficult for the consumers to buy both old car or new car. In the new cars tax policy, the government divides cars into 8 slabs according to the engine displacement of the car. The most surprising effect in this new tax policy is government imposed a tax on each seat of the vehicle. The withholding tax is fixed on the annual basis depending upon the seats of the vehicle.
According to the details, authorities imposed tax fee separate for both the non-filer and filer, the non-filers are targeted highly because they have to pay a double fee as compared to the filer. Below is the detail list of withholding tax on the registration of vehicle and transfer of the vehicle:
The above table shows that the vehicle under 851cc to 1000cc the withholding tax fee for filer is Rs. 5000/- and for the non-filer is Rs. 10,000/- non-filer pay double amount, and the engine displacement under 1001cc to 1300cc the amount filer pay regarding this is Rs. 7500/- and the non-filer pay Rs. 15,000/-. The withholding tax is going up according to the engine displacement of the vehicle. And the engine displacement above 3001cc and above the non-filer bound to pay Rs. 125,000/- and the filer is bound to pay Rs, 62,500/-, for the non-filer it’s very heavy amount government imposed on it.
Here is the mention of the new price according to the 4 seat vehicles:
The above table shows the withholding tax according to the 4 seat vehicle. All of these new taxes government-imposed is going to discourage the consumers. In Pakistan, the majority of people belongs to the middle class and the new taxes are very heavy amounted tax and the tax not only applied one time in the year its apply many times when the vehicle transfer to the other owner. The new taxes will highly impact on the purchase and sale of the vehicle especially the cars engine displacement under 1300cc.
On the other side, the government did not stop here they announced to collect income tax along with the annual token tax on the cars. The cars with the engine displacement of 1001cc to 1100cc the token tax fee is Rs. 1500 for the filer and Rs. 3000 for the non-filer and the cars above 2000cc engine displacement government impose an income tax of 10,000 for the filer and 20,000 for the non-filer to be paid along with the annual token tax.
The new taxes government imposed on the public are unfair for the public of Pakistan and people are totally refused this new tax policy because the middle-class people have no capacity to pay these high amounted tax. But if the tax schedule is mention on the bill then the new taxes must be applied from the 1 July.
In my opinion, the new taxes is injustice and it is an extra burden on the public the withholding tax on the vehicle transfer is an additional burden on the general public. The government should think about it and give some relaxation to the general public.
