Budget 2023-24: FBR mulls hiking advance tax on vehicle registration
Resource and Revenue Mobilsation Commission proposes imposition of advance tax on the basis of value of vehicle
May 24, 2023
- RRMC proposes imposition of advance tax as per value of vehicle.
- For vehicles valuing Rs10-Rs30 million, the tax rate will be 4%.
- For an oil tanker contractor, the tax rate of 2.5% would apply.
ISLAMABAD: With a few days left in the upcoming budget, the Federal Board of Revenue (FBR) is mulling options to raise advance tax on motor vehicle registration whereby the rate of non-filers is proposed to be increased in the range of 10 to 35% on the basis of value of vehicles, The News reported Wednesday.
While currently the advance tax is charged on the basis of engine capacity, some major and drastic changes are under consideration for the upcoming budget — which is expected to be unveiled in the first week of June.
The Resource and Revenue Mobilisation Commission (RRMC) has proposed the imposition of advance tax on the basis of value of vehicle.
Under the proposed rate, the RRMC recommended to the government to slap a 2% advance tax for the corporate sector and 3% for the non-corporate sector and for those who appeared in the active taxpayers list (ATL) for the last three years for motor vehicles having a value of up to Rs10 million.
The tax rate per person is proposed at 10%. For the value of motor vehicles from Rs10 million to Rs30 million, the tax rate will be 4% and 5% for corporate and non-corporate sectors whereby they exist in ATL for the last three years.
For a vehicle valuing Rs30 to Rs 100 million, the proposed rate of tax will be 6-7% respectively for corporate and non-corporate sectors. The tax rate for a person is proposed to be jacked up to 30%.
For vehicles valued up to Rs100 million, the rate is proposed at 8% and 10% for corporate and non-corporate sectors respectively who exist in the ATL for the last three years. The proposed rate for a person will be 35%.
The RRMC had proposed transport sector subject to a minimum tax regime at the rate of 3% of the gross turnover, in cases of transport services provided to a withholding agent.
Tax at 3.5% of the gross amount received is levied for rendering or providing carriage services by transport contractors. For an oil tanker contractor, the tax rate of 2.5% would apply.
