LAHORE (National Times)- Pakistan Businesses Forum (PBF) urged the government to call off advance tax of Federal Board of Revenue (FBR) on motor vehicles up to 1600cc on Thursday, saying it could facilitate the public amid ongoing high inflation and help the automobile industry generate more production.

“It is unfortunate that people eventually get a new vehicle after paying numerous taxes including FED [federal excise duty], sales tax, CVT [capital value tax] tax, withholding tax, and a handsome excise fee the registration. With all this, they are also bound to pay an advance tax for a new vehicle prior to registration,” said PBF vice president Ahmed Jawad.

Jawad added that automobile companies had compelled customers to go through a long-awaited booking process. He criticised over the government saying customers are squeezed with “unjustified taxation” when automobile assemblers already collect due taxes at source and mention them in vehicle invoices.

The advance tax on motor vehicles with engine capacity up to 1000cc has been increased Rs100,000 from Rs50,000. Buyers of vehicles between 1001cc to 2000cc now have to pay Rs200,000 in advance tax, as compared to Rs100,000 previously. Similarly, the advance tax for motor vehicles of 2001cc and above has been hiked to Rs400,000 from Rs200,000.

PBF official told FBR, in January 2022, notified enhanced rates of advance tax second time on those vehicles, which sold prior to first registration. The tax rates have been enhanced through Finance (Supplementary) Act, 2022 through making amendment in Section 231(B)(2A) of Income Tax Ordinance, 2001.