Revamped car registrations policy is hitting back government. As non-filers are forbidden to register an automobile, 23% reduction has been seen in the total number of registered vehicles in the first two months of the ongoing fiscal year 2018.
According to the local media, Department of excise and taxation is facing huge losses of millions of rupees. All regional centers in Punjab including the capital Lahore are facing the same dwindle of new registrations.
The Federal Board of Revenue (FBR) has enforced this restraint on non-filers from buying and registering new in the finance act 2018. This finance act has become the main reason that the excise department is unable to fetch old revenue.
According to Lahore Excise department, in the first two months of the previous year, 7600 cars, having the engine capacity of 1300cc were registered. This year the number is dropped to only 5700 cars of the same category.
If we take into account all vehicles registered irrespective of the engine capacity, 18,500 vehicles were registered in the first two months of 2017 whereas now the number has fallen to 14,300 vehicles.
So far, 3 to 4 letters have been sent to FBR from Excise department to reconsider the policy regarding the exemption of non-filers but the FBR has not given any positive response to the department.
It is worth noting that Directorate General of Excise and Taxation Punjab had issued a notification to all its regional offices asserting that the non-filers can register and transfer the vehicles below 1000cc engines, which they had to take back as FBR clearly stated them to issue nullification orders.
Pakistan auto industry is witnessing some extraordinary growth stats if the people are barred to register new vehicles ultimately it will result in the downfall of the hard-earned development.
The finance act 2018, specifically the 227C article of the Income Tax Ordinance 2001, is facing much criticism ever since its implementation. The article has its own pros and cons. The government has to determine how to increase the pool of filers so that the institutions and people don’t suffer.