FBR on registration of vehicles in province an attempt to hamper tax collection

Correspondent

KARACHI: Sindh Minister for Excise and Taxation Mukesh Kumar Chawla on Saturday rejected massive tax uplift by Federal Board of Revenue (FBR) on registration of vehicles in Sindh and termed it an attempt to hamper tax collection of the province.

Addressing a press briefing at his office on Saturday, Mukesh Kumar Chawla commented over the Federal Government tax collection decision is the Guloo ax on Sindh province, ultimately it would be difficult for the people to pay double their vehicle taxes.

He said that the excise department had collected taxes of Rs 29 billion in 11 months, which is close to the target of Rs 32 billion. “The excise department had raised the tax target from Rs 8 billion to 32 billion in five years and hopefully we will also exceed this target this year,” he hoped.

The minister said that the FBR has raised tax net on vehicles to an unprecedented level, which would hurt the revenue of the province.

Giving details of the tax hike by FBR, the minister said that the FBR had made two categories of tax filers and non filers for the people registering their vehicles with the provincial department.

“For 850 CC vehicles, the FBR had asked us to receive Rs 10,000 as compared to Rs 7500 earlier, on 2000 CC and above vehicles, the rate is increased from Rs 50,000 to 150,000 and on 3000 CC vehicles, it had been raised to Rs 250,000,” he said.

For non-filers, the rates are Rs 10,000 for 850 CC vehicles, Rs 300,000 on 2000 CC  and above vehicles and Rs 450,000 on 3000 CC vehicles, he said adding that the current increase was almost 50 %, 600% and 900% in each respective category.

Chawla said that the FBR had also asked them to implement and recover this tax from July 1, which was not possible for them as the federal body had not provided them with the data of tax filers and non-filers.

“For implementing this whole process, it needed complete overhaul of the computerised section of excise department, which is not possible immediately,” he said adding that the FBR had promised them to provide a CD of tax filers and non-filer on monthly basis but in case of any delay, the working of excise would be affected badly.

The minister said that another tax which was hiked by FBR was advance withholding tax.

He said that the excise was receiving this tax at Rs 750 on small vehicles and Rs 12,000 on big vehicles but now it had been raised up to Rs 1000 and Rs 24,000 respectively.

He said that earlier these taxes were charged for one time while transferring vehicle on owners name for the first time, however, the FBR had directed them to receive this tax every time the vehicle is transferred to another owner during initial five years of the vehicles purchase.

He said that this practice would also increase use of vehicles in crime as people would avoid registering their vehicles on another name due to high cost and prefer running them on open letters, thus, paving way for terrorists to use these vehicles in their nefarious designs and making it difficult for LEAs to trace the culprit.