Due to the changes made to the import policy for secondhand cars, the Federal Board of Revenue (FBR) has suffered a substantial revenue loss of PKR 22 billion due to low tax collection on these vehicles during July-January (2019-20).
As per the FBR, the drop in revenue is because of the plunge in imports of around PKR 307 billion which is greater than the revenue shortfall of PKR 101 billion during July-January (2019-20).
Other factors mentioned by the FBR include the fall in large scale manufacturing as well as the auto sector which has seen a 39% fall in income tax and 28% in sales tax as compared to the same period last year.
Against the projected collection of PKR 88 billion, a mere PKR 47 billion was collected in this period leading to a budgetary shortfall of around PKR 40 billion.
The board added that one other reason that has impacted the revenue collection is the lower acceptability of documents when it comes to economic transactions.