ISLAMABAD:
The government has substantially reduced the advance income tax on transfer of ownership of vehicles for both filers and non-filers, although it has increased the annual token tax up to 25% for non-filers.
According to an explanatory circular that the Federal Board of revenue issued to the provincial and federal excise and taxation departments on Monday, the advance income tax on registration and purchase of new cars had remained unchanged.
The federal government reduced the advance income tax rates after phenomenally increasing it in the last fiscal year, which discouraged car owners from getting their vehicles transferred, raising security concerns.
The new rates are to cause a revenue loss of Rs500 million in the new fiscal year, however, by continuing the policy of increasing the cost of doing business for non-compliant persons, the FBR increased taxes on contractors, suppliers, brokerage commissions and on account of annual token fees, which will yield it additional Rs23 billion revenue, according to sources.
