The government has decided to collect a 3 percent advance tax at the time of registration of electric vehicles (E-vehicles) having a value of Rs. 5 million or more.
Explaining the Finance Act 2023, a tax expert told ProPakistani that the new law has not specified the advance tax rates for the registration of electric vehicles (E-vehicles). There is no mention of the tax rate for E-vehicles registration.
On the other hand, Finance Act 2023 said that the tax rate would be 3 percent in cases where engine capacity is not applicable and the value of the vehicle is Rs. 5 million or more.
The tax expert said that the FBR should have referred to the E-vehicles registration, but confusion has been created. The E-vehicles are covered under the category of vehicles without engine capacity, thus the tax rate would be 3 percent as specified in the Finance Act 2023.
Finance Act 2023 revealed that the value shall be in the case of motor vehicles (2001cc to 2500cc and above 3000cc) –
- Imported in Pakistan, the import value assessed by the Customs authorities as increased by customs duty, federal excise duty and sales tax payable at the import stage;
- Manufactured or assembled locally in Pakistan, the invoice value inclusive of all duties and taxes;
- Auctioned, the auction value inclusive of all duties and taxes.
Provided further that in cases where engine capacity is not applicable and the value of the vehicle is Rupees five million or more, the rate of tax collectible shall be 3 percent of the import value as increased by customs duty, sales tax and federal excise duty in case of imported vehicles or invoice value in case of locally manufactured or assembled vehicles, Finance Act added.
Under the Finance Act 2023, the government has imposed a fixed tax on imported and locally manufactured vehicles from 2001cc to above 3000cc.
