FBR Withdraws Summary to Reduce Taxes for Japanese Auto Makers

In a welcome move, the Federal Board of Revenue (FBR) at the last moment has recalled a summary that it had sent to the federal cabinet for approval calling for a reduction of sales tax liabilities on leading local car makers. It was titled “Amendments to the Third and Twelfth Schedules of the Sales Tax Act 1990”.

It has further decided to enhance the monitoring of sales tax collection as this tax has revealed itself to be the strongest tool to increase collection in the current financial year.

Shabbar Zaidi, FBR Chairman has ordered the relevant departments to take action against sales tax return non-filers for the July-August period.

The summary had sought to abolish the value-added tax of 3% on 32 imported products and impose lower taxes on sales of auto parts. The FBR chairman told the media that three products in use by the automakers will be taxed at the full retail price but FBR is still keen to abolish the value-added tax.

FBR, in an earlier summary, had sought to omit imported storage batteries, auto parts, tires and tubes from the retail price taxation. Under the Third Schedule of the Sales Tax Act they are taxed on the maximum retail price.

The Third Schedule empowers the FBR to impose 17% standard sales tax on higher retail prices instead of suppliers or manufacturers’ prices.


  • Suggest to please review/consider the waiver/tax reduction of Lithium Ion Batteries used for storage of power for PV/Solar power storage batteries, and Electric Vehicle EV solely relies on Lithium Ion batteries for application with Electric Cars/EV which stores power at recharging from home/charging stations to restore battery charge. This battery is reccomended for Climate Change worldwide and has a long life compared to existing batteries. The assembly/production of this battery should be encouraged from China which is world No.1 source for Lithium Ion batteries for Solar and EV bus, car, trucks, train, or any transport. The regular lead acid battery should be charged as usual to the local assemblers.


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