KARACHI: The tax authorities have collected Rs1.53 billion as withholding tax from new car sales and registration during seven months (July – January) of the current fiscal year.
The Inland Revenue offices of the Federal Board of Revenue (FBR) located in Karachi have collected Rs1.53 billion as withholding tax on new car sales and registration during first seven months of the current fiscal year as compared with Rs959 million in the corresponding months of the last fiscal year, according to official statistics made available to PkRevenue.com.
Motor registration authorities and car manufacturers collect withholding tax at the time of registration and sale of new car under Section 231B of the Income Tax Ordinance, 2001 on behalf of the FBR.
The tax collection at the time of sale by manufacturers increased to Rs616 million during first seven months of the current fiscal year as compared with Rs428 million in the corresponding months of the last fiscal year, showing an increase of 44 percent.
Similarly, the tax collection at the time of registration of new cars by provincial motor vehicle registration authorities sharply increased by 70 percent to Rs914 million during first seven months of the current fiscal year as compared with Rs531 million in the corresponding period of the last fiscal year.
The sharp increase in revenue collection under this head may be attributed to revival of economic activities after relaxation in restriction that were imposed to prevent coronavirus spread.
The sale of locally manufactured cars registered an increase of 23 percent to 97,469 units during first seven months of the current fiscal year to 79,458 units in the same period of the last fiscal year.
The growth has been seen even more higher while comparing the sale on year on year basis in January 2021. The car sales posted 46 percent to 17,515 units in January 2021 as compared with 11,964 units in the same month of the last year.