ISLAMABAD – Federal government has enhanced tax on the registration of vehicles above 2,000cc as part of measures for improving revenue collection to fulfil the condition of the International Monetary Fund.
In the revised Finance Bill, approved by the parliament last Sunday, the federal government has adopted taxation measures to generate additional revenue of Rs215 billion for the public exchequer.
After negotiations with the IMF team, the economic team led by Finance Minister Ishaq Dar evaluated different options for reducing the budget deficit to fulfil the condition of the global lending agency for securing a bailout package.
An increase in tax for registration of vehicles above 2000cc and measures like enhancing tax rates for salaried and non-salaried classes of higher brackets was the ultimate choice of the country’s economic managers.
The IMF executive director had earlier expressed concerns over the new amnesty scheme and missing the option of increasing the tax base in a progressive manner.
Instead of bringing more people to the tax net, the government has chosen the easy option of squeezing more taxes from the existing taxpayers.
The government has imposed a fixed tax on imported and locally manufactured vehicles from 2,001cc to 3,000cc and above.
The fixed tax will be 6% of the value of a vehicle having an engine capacity of 2,001cc to 2,500cc.
The fixed rate will be 8% of the value of a vehicle with an engine capacity of 2,501cc to 3,000cc.
The fixed tax will be 10% of the value of a vehicle with an engine capacity above 3,000cc.
