Only Tax Filers Will be Able to Purchase Cars Above 1000 CC

A joint meeting with the Commissioner of Income Tax, RTO-II, Lahore has agreed to amend the recent law that prevented non-filers from purchasing or importing a new car in Pakistan.

This new ruling has been a controversial subject, as many believe that it can result in significant downturns for the economic condition of Pakistan. Still, it was an effective measure to influence the country’s tax collection systems, and was sure to urge citizens to file their taxes.

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A bill, signed by the Director of Excise and Taxation has been passed that suggests some changes to the new law. It reads:

[Regarding the previous ruling that prevented filers from buying new cars in Pakistan], a meeting was held with the Commissioner of Income Tax, RTO-II, Lahore who was consented that:-

1. There is no requirement of filers for registration or transfer of motor cycles, commercial vehicles, and cars below 1000 cc [of engine capacity],
2. An applicant for registration of a car above 1000 cc is required to be a filer,
3. Motor car with engine capacity of 1000 cc and above registered by way of transfer (known NRT), the transferee is required to be a filer.

These changes came as part of the Finance Bill FY2018-19, that has been in effect since 1st of July 2018. Soon after it got passed, local auto assemblers such as Suzuki and Toyota suspended bookings for non-filers.

The bill has been reviewed to have an adverse prospect by some, because in addition to making people file their tax returns, it could also encourage second hand purchases or illicit imports from overseas.

We’ll update this post as further information becomes available.

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