In a bid to increase revenue, the FBR has decided to bring all businesses associated with the auto-sector into the tax net including denters, painters, parts dealers, showrooms, workshops and vehicle service centers.
This step is not surprising given the government has been seeking to increase revenue in order to stabilize the economy and the auto-sector is the latest target.
According to reports, the Regional Tax Office has collected and studied information regarding large car showrooms, official car dealers, large service station, workstations, and company-designated centers. This information has helped paint a picture regarding the overall revenue of all these entities in Karachi and over 312 of them have been issued a notice.
BTB has offered some insight that their study has concluded that most of the people in the auto-sector businesses are mandated to be in the tax net as well as submit their taxes.
Unfortunately, they are illicitly evading taxes and are also not in the tax bracket and this has spurred officers in all zones of the region into action to bring the auto-sector into the tax net. It is pertinent to note that no mention of a fine has made for the defaulters.
It is worth pointing out that while this is great step to expand the tax net and boost revenue, it can backfire. As the common man might be forced to bear the brunt with the parts sellers, workshops, service station and dealers increasing their prices. We have already seen this with locally assembled car makers increasing their prices multiple times just this year.
Used cars mentioned for very low valuation for duty, tax purposes. The cars are environmentally consuming gasoline, smoke, and environmentally hazardous. As you know worldwide practise for EV, Hybrid transport as bus, trucks, motor cycle, e-bicycle, bicycle, cars are supported tax free, as they help environment. Pakistan customs should study global practices, and waiver taxes for environment friendly transport, bus, truck, car, motor cycle, double decker bus, coach all should be allowed tax free for CKD, SKD, and full assembled autos. This will bring prosperity, reduce inflation impact, and transportation would be cheaper under the umbrella of RTA Road Transport Authority, which will endorse/support this recommendation for adoption by the customs authorities in Pakistan.