Auto assemblers have stopped accepting vehicle booking requests from non-filers to comply with the Finance Act 2018.
Auto assemblers have stopped accepting vehicle booking requests from non-filers to comply with the Finance Act 2018.

KARACHI: Around 25 per cent of the non-filers who booked their vehicles had become income tax filers after assemblers asked the dealers to individually approach each customer to change their filing status, according to Japanese auto assemblers in the country.

Total advance bookings for new vehicles have dipped by 30pc since the government banned non-filers to purchase new vehicles.

However, the remaining 75pc of the bookings have been cancelled since May following the government’s decision to ban sale of vehicles to non-filers. Majority of the non-filers have asked for refunds whereas some are still waiting for clarity on government’s stance on the issue.

Assemblers have halted booking any vehicles from non-filers since May – including individuals and corporate customers – to comply with the Finance Act 2018. The bill prevents non-filers from booking or registering new vehicles from July onwards.

Auto assemblers have taken upon themselves to urge buyers to become filers after the government’s ban in order to avoid future complications.

Indus Motors Limited (IMC) CEO, Ali Asghar Jamali said that around 20-25pc of non-filers had become income tax filers; however around 20-25 per cent non-filers had cancelled their booking requests.

He said that IMC receives 4,000-5,000 booking requests every month. IMC — Toyota — is Pakistan’s second leading manufacturer making up from some 23pc of the total sales producing only three models — Corolla, Fortuner and Hilux — in Pakistan.

Critics have warned that the auto sector sales will decline following the government’s ban. “We have witnessed 20-25 per cent decline in advance booking of vehicles from July on wards till to date,” Jamali claimed.

Pak Suzuki Motor Company spokesperson, Shafiq Ahmed Shaikh said that the company had stopped accepting booking requests from non-filers as early as third week of May. He said that 659 advance booking orders from non-filers are still pending as of June 20.

“Our overall sales from July to September 2018 have plummeted by 40pc in which most of the cars are up to 1,000cc units,” he said.

He claims that of the total orders, some 510 individuals hailing from rural areas had become filers after efforts were made at the dealership to inform customers. Of the remaining orders, 15 individuals – concentrated in urban areas – had taken back their partial refund payment and 125 people were still waiting for the clarity on government’s evolving stance on the ban.

An auto dealer said that at Honda – with the third largest market share in auto sales – non-filers make up for less than 10pc of the total advance booking requests since company’s sales are mainly driven from urban areas. He said that the majority of rural customers opt for Suzuki and Toyota.

The government in a bid to tighten their noose around those evading taxes have introduced a set of legalities to improve tax collection and the number of filers.

According to Pakistan Automotive Manufacturers Association, assemblers are continuing to share the data on non filers to the Federal Board of Revenue on regular basis.

Published in Dawn, October 9th, 2018