PAMA concerned at restriction imposed on non-filers
RECORDER REPORT
KARACHI: Pakistan Automotive Manufacturers Association (PAMA) on Monday expressed concerns over the restriction imposed on non-filers for purchasing motor vehicles in recent federal budget.
In a letter written to Finance Minister Miftah Ismail, Director General PAMA Abdul Waheed Khan feared of sudden drop in the sales of automobiles, following newly inserted section 227C in the Income Tax Ordinance 2001 that restricted non-filers from purchasing motor vehicles.
“Presently, there are about 1.2 million filers in the country and if this new condition will be put into effect, this would result in sudden drop in the sales,” he said.
“Assuming a filer buying vehicle once in five years, the yearly sales are expected to go down to about 2,40,000 units, against the current yearly projected figures of 3,50,000 units,” he added.
He said that if this newly inserted section was approved, the projected industry volume to 5,50,000 units under the Auto Policy 2016-21 would be lost; adding that the new entrants would see it as unfriendly to the auto policy.
“Besides major adverse consequences to the industry, the new condition would also be counterproductive; government losing the revenue of second highest revenue paying industry,” said DG PAMA; adding that the market mechanism would indeed come into play to defeat the intent of this condition result in opening the avenues of misuse and diluting its impact.
He, therefore, 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 of non-filers, purchasing the automobiles, by gradually increasing the amount of advance tax, under section 231B of Income Tax Ordinance, 2001 for non-filers and simultaneously decreasing this tax for the filers,” he said. Furthermore, he said that they did not find merit in imposing this new condition and requested the government to withdraw the same on immediate basis.
