ISLAMABAD: The government has increased the advance income tax on the registration of vehicles above 2000cc under the amended Finance Bill 2023.

Under the amended Finance Bill 2023, the government has imposed a fixed tax on imported and locally manufactured vehicles from 2001cc to above 3000cc.

Under the new income tax slabs, the fixed rate of tax would be 6 percent of the value of a vehicle having engine capacity 2001cc to 2500cc.

Goods/passenger transport vehicles: RRMC recommends one-time/ transactional advance tax

The fixed rate of tax would be 8 percent of the value of a vehicle with engine capacity of 2501cc to 3000cc.

Under the third revised slab, the fixed rate of tax would be 10 percent of the value of a vehicle having engine capacity above 3000cc.

Under section 231B of the Income Tax Ordinance 2001, an advance tax has been collected on motor vehicles. Every motor vehicle registering authority of Excise and Taxation Department shall collect advance tax at the time of registration of a motor vehicle, at the rates specified.

Every motor vehicle registering authority of Excise and Taxation Department shall collect advance tax at the time of transfer of registration or ownership of a motor vehicle, at the rates specified. Provided that no collection of advance tax under this subsection shall be made on transfer of vehicle after five year from the date of first registration in Pakistan.

Every motor vehicle registration authority of Excise and Taxation Department shall, at the time of registration, collect tax at the rates specified, if the locally manufactured motor vehicle has been sold prior to registration by the person who originally purchased it from the local manufacturer. Every manufacturer of a motor vehicle shall collect, at the time of sale of a motor car or jeep, advance tax at the rate specified from the person to whom such sale is made, it added.

Copyright Business Recorder, 2023