Wednesday May 24, 2023
RRMC proposes imposition of advance tax based on vehicle value.
For vehicles worth Rs 10 lakh to Rs 30 lakh, the tax rate will be 4%.
A tax rate of 2.5% would apply to suppliers of oil tankers.
ISLAMABAD: With the upcoming budget days away, the Federal Board of Revenue (FBR) is mulling options to increase the advance tax on motor vehicle registration, proposing an increase in the share of unregistered persons ranging from 10 to 35% based on the value of the vehicles , The News reported Wednesday.
While the advance tax is currently charged on the basis of engine volume, some major and drastic changes are being considered for the upcoming budget – which is expected to be unveiled in the first week of June.
The Resource and Revenue Mobilization Commission (RRMC) has proposed imposing an advance tax based on the value of the vehicle.
As part of the proposed rate, the RRMC has recommended the government to impose 2% advance tax on the corporate sector and 3% on the non-corporate sector and those who have appeared on the active tax payers' list (ATL) in the last three years. motor vehicles worth up to Rs.10 lakhs.
The proposed tax rate per person is 10%. For motor vehicle value between Rs 10 crore and Rs 30 crore, the tax rate will be 4% and 5% for corporate and non-corporate sectors, existing in ATL for the last three years.
For a vehicle worth Rs 30 crore to Rs 100 crore, the proposed tax rate will be 6-7% for corporate and non-corporate sectors. The tax rate for a person is proposed to be increased up to 30%.
For vehicles worth up to Rs 100 crore, the rate is proposed at 8% and 10% for corporate and non-corporate sectors existing in ATL for the last three years. The proposed rate for a person will be 35%.
The RRMC has proposed the transport sector subject to a minimum tax regime of 3% of gross turnover in cases of transport services provided by withholding tax intermediaries.
A tax of 3.5% of the gross amount received is levied for the provision or provision of transport services by contracted carriers. A tax rate of 2.5% would apply to suppliers of oil tankers.
