Budget 2014-15: Sindh govt targets bikers to widen tax net
Proposal calls for taxes to be levied on owners of 120sq yard plots, petroleum products.
Proposal calls for taxes to be levied on owners of 120sq yard plots, petroleum products. PHOTO: FILE
KARACHI:
The upcoming provincial budget looks like bad news for motorcycle owners. According to the budget proposal submitted by the excise and taxation department, each motorcycle owner will now have to pay considerably more in taxes as compared to previous years.
The proposal says that the buyers will pay 50 per cent more as life-time tax compared to the previous budget. The registration book fee has been proposed to be increased by 150 per cent while a 900 per cent increase has been proposed on the fee for duplicate books. Furthermore, motorcyclists will also have to pay 60 per cent for the transfer of documents in their name.
The existing life-time tax levied on motorcycles is Rs1000, which the government has now proposed to be increased to Rs1,500. This is expected to contribute Rs84 million more to the government’s accounts. The step will also discourage vehicle owners who obtain unnecessary duplicate copies of registration certificates (DCRC). The duplicate copies will now cost them Rs2,000, instead of the earlier rate of Rs200.
Meanwhile, the fees for a registration book have been proposed to be increased from Rs200 to Rs500. The reason for this price hike is said to be the increase in prices of printing material and is projected to bring in Rs60 million more for the exchequer.
These increases in the tax tariff are not limited to new buyers only. Those who wish to transfer the documents of their vehicles to their names will now have to pay Rs200 against the previous rate of Rs125. With 835,183 motorcycles registered in Karachi alone, the new tariff is expected to bring in Rs20 million more.
On the other hand, motorcycle owners have taken exception to the proposed increase in taxes, claiming this will adversely affect their standard of living. “Majority of the motorcycle owners are middle-class labourers,” said Rizwan Ahmed, a resident of Orangi Town. “It is already difficult for us to bear the fuel expenses; these taxes will increase our burden.”
Azmat Shah, who works at Jinnah Postgraduate Medcial Centre was of the opinion that the proposed increase in taxes will discourage people from registering their vehicles. “Currently, motorcycle owners have to pay Rs2,800 to Rs3,000 to register a new motorcycle,” he said. “With the new taxes, the cost of registration will soar to Rs6000.”
Property tax
For the next fiscal year, the government has proposed to tax owners of residential plots measuring 120 square yards. These were previously exempted from property tax. The minister for excise and taxation, defending the decision to impose the new tax, told The Express Tribune that people are now constructing multi-storey buildings on these plots. The buildings are either rented out or sold, he claimed. The new tax is projected to bring in Rs110 million for to the exchequer.
Cess Tax
For the first time in history, the Sindh government is going to impose infrastructure cess on petroleum and oil products. The provincial minister for excise and taxation reasoned that, since the provincial government incurred heavy expenditure for the maintenance and development of infrastructure for the smooth transport of imported goods, including petroleum and oil products, it was right to impose cess tax on these products. The tax will range between 0.25 to 0.5 per cent. “With this, the government can generate between Rs1,300 million to 2,600 million.” He added that the government also provided security, through the police and Rangers.
Targets achieved
The excise and taxation department has almost met the current year’s target by collecting Rs28.9 billion in taxes by April 2014. The target was to collect approximately Rs32 billion in the current year.
It has now set the target to generate Rs36.6 billion for the upcoming budget. The department has projected to generate Rs5 billion from motorcycle taxes, Rs2.2 billion from property tax, Rs3.8 billion on excise enactment, Rs25 billion on infrastructure cess, Rs200 million from cotton fees, Rs350 million from professional tax and Rs42 million from entertainment duty.
Published in The Express Tribune, June 6th, 2014.
The upcoming provincial budget looks like bad news for motorcycle owners. According to the budget proposal submitted by the excise and taxation department, each motorcycle owner will now have to pay considerably more in taxes as compared to previous years.
The proposal says that the buyers will pay 50 per cent more as life-time tax compared to the previous budget. The registration book fee has been proposed to be increased by 150 per cent while a 900 per cent increase has been proposed on the fee for duplicate books. Furthermore, motorcyclists will also have to pay 60 per cent for the transfer of documents in their name.
The existing life-time tax levied on motorcycles is Rs1000, which the government has now proposed to be increased to Rs1,500. This is expected to contribute Rs84 million more to the government’s accounts. The step will also discourage vehicle owners who obtain unnecessary duplicate copies of registration certificates (DCRC). The duplicate copies will now cost them Rs2,000, instead of the earlier rate of Rs200.
Meanwhile, the fees for a registration book have been proposed to be increased from Rs200 to Rs500. The reason for this price hike is said to be the increase in prices of printing material and is projected to bring in Rs60 million more for the exchequer.
These increases in the tax tariff are not limited to new buyers only. Those who wish to transfer the documents of their vehicles to their names will now have to pay Rs200 against the previous rate of Rs125. With 835,183 motorcycles registered in Karachi alone, the new tariff is expected to bring in Rs20 million more.
On the other hand, motorcycle owners have taken exception to the proposed increase in taxes, claiming this will adversely affect their standard of living. “Majority of the motorcycle owners are middle-class labourers,” said Rizwan Ahmed, a resident of Orangi Town. “It is already difficult for us to bear the fuel expenses; these taxes will increase our burden.”
Azmat Shah, who works at Jinnah Postgraduate Medcial Centre was of the opinion that the proposed increase in taxes will discourage people from registering their vehicles. “Currently, motorcycle owners have to pay Rs2,800 to Rs3,000 to register a new motorcycle,” he said. “With the new taxes, the cost of registration will soar to Rs6000.”
Property tax
For the next fiscal year, the government has proposed to tax owners of residential plots measuring 120 square yards. These were previously exempted from property tax. The minister for excise and taxation, defending the decision to impose the new tax, told The Express Tribune that people are now constructing multi-storey buildings on these plots. The buildings are either rented out or sold, he claimed. The new tax is projected to bring in Rs110 million for to the exchequer.
Cess Tax
For the first time in history, the Sindh government is going to impose infrastructure cess on petroleum and oil products. The provincial minister for excise and taxation reasoned that, since the provincial government incurred heavy expenditure for the maintenance and development of infrastructure for the smooth transport of imported goods, including petroleum and oil products, it was right to impose cess tax on these products. The tax will range between 0.25 to 0.5 per cent. “With this, the government can generate between Rs1,300 million to 2,600 million.” He added that the government also provided security, through the police and Rangers.
Targets achieved
The excise and taxation department has almost met the current year’s target by collecting Rs28.9 billion in taxes by April 2014. The target was to collect approximately Rs32 billion in the current year.
It has now set the target to generate Rs36.6 billion for the upcoming budget. The department has projected to generate Rs5 billion from motorcycle taxes, Rs2.2 billion from property tax, Rs3.8 billion on excise enactment, Rs25 billion on infrastructure cess, Rs200 million from cotton fees, Rs350 million from professional tax and Rs42 million from entertainment duty.
Published in The Express Tribune, June 6th, 2014.