ISLAMABAD: Federal Board of Revenue (FBR) Chairman Tariq Bajwa has assigned a task to Member Accounting Ali Salman Abbasi to prepare an analytical report into the lesser revenue collection out of withholding tax from vehicles despite changes in rules.
The FBR collected an approximate amount of Rs 4 billion tax from this sector last year. “Abbasi has been directed to submit report in this regard by the end of this month,” a well placed source in the FBR told this scribe here on Wednesday. The source said that FBR introduced changes in tax rates on withholding taxes on new vehicles and annual tax on registration and different ratio of tax was imposed for fillers of tax returns and non fillers of tax returns. The Chairman has sought this analytical report from Ali Salman Abbasi due to the fears of lesser volume of revenue collection from this sector.
“This tax is collected from the registration of new vehicles as well as on their transfer from one owner to the other,” the source said adding that now the Member Accounting had been assigned to prepare a report in this regard as majority of problems in this regard were faced in Sindh.
“In Sindh, the registering authorities did not collect the tax at new tax rates for the first three to four months which resulted in shortfall of tax collection of Rs 1 billion, approximately 5 to 10% from this sector,” the source said, adding that FBR expected a higher volume of tax collection from this sector. However, it did not happen.
Previously the source that withholding tax from new vehicles was collected at the time of their registration, but now the FBR had directed the manufacturers to collect tax from buyer of vehicles and deposit the full amount of tax at the time of sale of new vehicles.
“As per preliminary analysis carried out by FBR, it has been found out that less amount of tax was collected and deposited by the registering authorities, but now analysis will focus either manufacturers of vehicles have collected due amount from buyers of vehicles and deposited to the FBR or not,” the source added.
