FBR collected Rs 730 million from people involved in own-money business

own money

The Federal Board of Revenue (FBR) has collected Rs. 730 million from individuals engaged in the automobiles sector with their own money.

On the proposal of the Ministry of Industries and Production, the FBR Chairman, Dr. Muhammad Ashfaq Ahmed, told the Senate Standing Committee on Finance, Revenue, and Economic Affairs that the FBR has suggested to increase the advance tax to prevent own-money (premium).

According to reports, the FBR has recommended raising the 1000cc car tax to Rs. 100,000 from Rs. 50,000, and the 1001cc to 2000cc vehicle tax to Rs. 200,000 from Rs. 100,000. In addition, the tax authority has proposed raising the threshold for 2001cc and above automobiles to Rs. 400,000 from Rs. 200,000.

Read more: Govt imposes advance tax on vehicles to discourage ‘own money’

The FBR estimates that this approach will generate more than Rs. 500 million in income, and the committee members collectively agree that vehicle costs will rise as a result of this advance tax.

Senator Mussadiq Malik stated that if the supply of vehicles is increased, the culture of on-time payment can be reduced, and Chairman of the Committee Senator Talha Mahmood inquired as to why the supply of vehicles cannot be increased.

According to Dr. Ahmed, the culture of own-money still persists in the country. This withholding tax will be collected by the FBR on the purchase, registration, and transfer of motor vehicles. He stated that the Ministry of Industries and Production can explain why this tax is being proposed.

Senator Mahmood planned to invite the Secretary of Industries to discover why this tax was introduced.

The FBR imposed the advance tax in June 2021 to discourage the own-money culture, however despite levying the advance tax in July 2021, the premium charges still increasing.

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