Five percent WHT on purchase of vehicles proposed: governments, foreign diplomats exempted

The proposed 5 percent withholding tax on purchase of new motor cars and jeeps would not be applicable to Federal Government, Provincial Governments, local Governments and foreign diplomats. It is learnt that the Federal Board of Revenue (FBR) has proposed 5 percent withholding tax on purchase of new motor cars and jeeps in budget (2013-14). The proposal has been drafted at the level of the Board for consideration in the upcoming budget.
As per proposed section 231B in the Income Tax Ordinance 2001, every manufacturer or authorised dealer of motor vehicles shall at the time of sale of a motor car or jeep collect advance tax, at the rates specified in Division VII of Part IV of the First Schedule of the Income Tax Ordinance 2001.
Advance tax under this section shall not be collected from the Federal Government, a Provincial Government, a local Government, a foreign diplomat, a diplomatic mission in Pakistan, or a person who produces a certificate from the Commissioner that his income during the tax year is exempted from tax. The advance tax collected under sub-section (1) shall be adjustable, proposal added.