KARACHI: The Pakistan Automobile Assemblers and Dealers Association has claimed that the government had lost over Rs100 million in three months since July as the Federal Board of Revenue (FBR) could not collect withholding tax on imported used cars.

In a statement, Chairman Iqbal Shah said that the FBR collected withholding tax through provincial excise departments only from new vehicles due to technical and procedural issues with their systems. This spared over 5,000 imported used vehicles from the tax, causing a loss to the national kitty.

The FBR had made two categories — tax filers and non-filers — for people registering their vehicles with the provincial departments.

For 850cc vehicles, the FBR is collecting Rs10,000 as compared to Rs7,500 earlier. On the vehicles of 2,000cc and above, the rate was increased from Rs50,000 to Rs150,000 and on 3,000cc vehicles, it was raised to Rs250,000.

For non-filers, the rates are Rs10,000 for 850cc, Rs300,000 on 2,000cc and above, whereas Rs450,000 on 3,000cc vehicles.

The WHT on new cars is collected by assemblers. However, used cars were exempted because of non-availability of filer/non-filer information or unavailability of system at Excise and Taxation Department.

More than 6,000 used vehicles (cars and LCVs) were imported in the first quarter (July-September) 2014-15, and its breakup was: 800cc and lower, more than 2,750 units, 800-1000cc 1,500 units and 1301-1500cc 1,000 units. In luxury and SUV category, 400 units were imported. More than 250 units were imported in commercial vehicle category.

Published in Dawn, October 18th, 2014