Purchasing vehicles: PAMA suggests changes in restrictions for non-filers

Published: May 8, 2018
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Official says under new condition sales may go down from projected 350,000 to 240,000 units
PHOTO: REUTERS

Official says under new condition sales may go down from projected 350,000 to 240,000 units PHOTO: REUTERS

LAHORE: The Pakistan Automotive Manufacturers Association (PAMA) has suggested some changes in the budget that could otherwise gravely harm the auto industry if not addressed immediately.

In a letter written to Finance Minister Miftah Ismail, PAMA DG Abdul Waheed Khan commended him on presenting a budget with extraordinary relief measures and major steps to set the direction of economy, while also drawing his attention to new section 227C in the income tax ordinance that restrict non-filers from purchasing motor vehicles.

“Presently there are limited filers in the country, about 1.2 million. As this new condition is put into effect, only the filers would buy the vehicles, which would result in a sudden drop in sales,” said the PAMA DG.

“Assuming a filer buys a vehicle once in five years, the yearly sales are expected to go down to about 240,000 units, against the current yearly projected figures of 350,000 units,” he added.

Khan went to great lengths and said, “We understand that if the filer condition stays all industry volume projections to 550,000 units, under the Auto Policy 2016-21 would be lost.

The new entrants would see this new condition alien to the auto policy, to the word of which, they responded and invested in our market. All those big names presently heading to our market would frustrate with this new condition and would lose confidence in our word.”

He suggested a scheme that would help the government bring the non-filers in the tax net. The PAMA official proposed different tax rates for filers and non-filers for the next five years encouraging the citizens to file tax returns to pay comparably less tax on passenger cars and commercial vehicles (trucks/buses).

“This idea may be carried further to tighten the noose around non-filers, purchasing the automobiles, by gradually increasing the amount of advance tax, under section 231B of Income tax ordinance, for non-filers and simultaneously decreasing this tax for the filers,” he added. 

Published in The Express Tribune, May 8th, 2018.

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