Vehicle taxes: SMS service to be launched to curb token tax fraud

‘Agents’ fleecing customers by overstating token tax payments, faking challan forms.

LAHORE:

The Excise and Taxation (E&T) Department is to launch an SMS service for Lahore in a month where vehicle owners can get details of registration and token tax payments in order to curb fraud by ‘agents’.

Agents refers to the men that hang around E&T and passport offices, offering to stand in for customers for a fee so the passport-seeker or vehicle owner doesn’t have to spend hours in queues.

Officials said that the plan for the SMS service was launched around three months ago when E&T officials and police raided a basement on Nabha Road and arrested several people for making fake registration challan forms. The agents would give their customers fake challans overstating the tax that was paid to register their vehicles so they could pocket the difference. Several of these fake challans were caught by E&T police at vehicle checkpoints.

Another common method of deceit used by agents is to tamper with token tax receipts to increase the stated payment. For example, if Rs50,000 was to be paid, the agent would change it to Rs60,000 and keep the extra Rs10,000 for himself. An E&T official said that this kind of fraud was often perpetrated in connivance with department officials.

The SMS service would allow vehicle owners to quickly check the amount they have paid for registration or in token tax, by sending their registration number by SMS to a four-digit number. Later, users will also be able to get the registration details of their cars by SMS.

E&T Motor Registering Authority Region C Director Masudul Haq said that the service would be operational in around a month and two companies were competing for the contract. He said senior department officials had been presented the plan and they had approved of it.



“The idea is to allow people, cheaply and quickly, to verify the amount they have paid against the registration number. Even though people can do this on the web, not many use the facility. Hopefully more people will use the SMS service in order to protect from fraud,” he said.

An E&T official said that the company likely to be chosen for the service had suggested the SMS number 9990. The bidding companies are seeking payments of around Rs16,000 per month and around 40 paisas per text message.

Motor Registration Authority (New Cars) Qamarul Hasan said that registration rates varied depending on the type of vehicle. Cars of up to 1,000cc paid 1% of the invoice price, cars between 1,000cc and 2,000cc paid 2%, and cars above 2,000cc paid 4% of the invoice price, in addition to a fixed tax. He said that token tax and withholding tax rates depended on the date they were paid. “It is not simple to calculate, which is why agents can easily deceive people,” he said. Vehicle owners can find out how much they will need to pay for registration or token tax through a calculator of the Motor Transport Management Information System website. The site carries registration details for some 6.5 million vehicles, of a total of around 10 million vehicles registered in the Punjab. The site is up to date up to mid-2012 for Lahore and up to the current month for most other districts.

Published in The Express Tribune, March 17^th, 2013.