The Federal Board of Revenue (FBR) has collected Rs. 730 million from those people who are involved with own-money associated with the vehicles business.
The Chairman of the FBR, Dr. Muhammad Ashfaq Ahmed, told the Senate Standing Committee on Finance Revenue and Economic Affairs that the FBR has proposed to enhance the advance tax to discourage on-money (premium) based on the recommendation of the Ministry of Industries and Production.
The FBR has reportedly proposed to enhance Rs. 100,000 from Rs. 50,000 for 1000cc vehicles, and Rs. 200,000 from Rs. 100,000 for 1001cc to 2000cc vehicles. Additionally, the tax department has suggested enhancing Rs. 400,000 from Rs. 200,000 for 2001cc and above vehicles.
The FBR has estimated a collection of more than Rs. 500 million in revenue from this proposal, and the committee members unanimously said that the prices of vehicles would increase from this advance tax.
Senator Mussadiq Malik said that the culture of on-money can be minimized if the supply of vehicles increases, and the Chairman of the Committee, Senator Talha Mahmood, asked why the supply of vehicles cannot be increased.
Dr. Ahmed said that the culture of on-money unfortunately stills exists in the country. The FBR will collect this withholding tax on the purchase, registration, and transfer of motor vehicles. The Ministry of Industries and Production can explain the reason for proposing this tax, he added.
Senator Mahmood decided to summon the Secretary of Industries to enquire the reason for the proposal of this tax.
The FBR had imposed the advance tax in June 2021 to discourage the on-money culture but the trend is increasing despite levying the advance tax from July 2021.
Source: Pro Pakistani