KARACHI: The local car assemblers are main beneficiary of the government decision to allow non-compliant taxpayers for purchasing motor vehicles, analysts said on Thursday.
A day earlier on floor of the house Finance Minister Asad Umar presented this proposal to the Finance Supplementary (Second Amendment) Bill, 2019 to allow non-filers of income tax returns to purchase any engine capacity of motor vehicles.
Though the decision has been taken to generate tax revenue through collection of withholding tax on purchase of motor vehicles as non-filers are required to pay higher rate but it seems to be a big ‘U’ turn by the present government.
The PML-N government in its last budget 2018/2019 announced to imposed restriction on non-filers to purchase motor vehicles of any engine capacity in order to bring large number of tax evaders into tax net.
The present PTI government however in its Finance Supplementary (Second Amendment) Bill, 2019 initially proposed to allow non-filers for purchasing motor vehicles with engine capacity up to 1300CC. However, finalizing this bill and approval from the parliament the concession to non-filers further enhanced and now they would be able to purchase any engine capacity motor vehicle.
The analysts at Taurus Securities Limited said that the Supplementary Finance (Second Amendment) Bill, commonly known as the ‘Mini-Budget’, passed in the National Assembly yesterday, in the midst of an opposition walk-out protesting the Bill’s contents.
The Bill has wholly removed the ban on Non-Filers; the initial proposal allowed Non-Filers access to the market for cars with a cylinder capacity of less than 1300cc.
All three auto players (PSMC, INDU and HCAR) will be the beneficiary of this reversal in policy, as they will now be able to clear their build-up of stock.