Karachi, September 12, 2024 – The Federal Board of Revenue (FBR) has officially announced the tax rates for the registration or transfer of ownership of motor vehicles for the tax year 2024-25.
These rates, notified under Section 231B(2) of the Income Tax Ordinance, 2001, apply differently to individuals on the Active Taxpayers List (ATL) and those not on the list (non-ATL), offering incentives for tax compliance.
Vehicle Registration Tax Rates for TY 2024-25
The FBR has categorized vehicles based on engine capacity, with varying tax rates for those registered under ATL and non-ATL. Below are the detailed tax rates:
1. Vehicles with engine capacity up to 850 cc:
o ATL: No tax
o Non-ATL: No tax
2. Vehicles with engine capacity between 851 cc and 1000 cc:
o ATL: Rs 5,000
o Non-ATL: Rs 15,000
3. Vehicles with engine capacity between 1001 cc and 1300 cc:
o ATL: Rs 7,500
o Non-ATL: Rs 22,500
4. Vehicles with engine capacity between 1301 cc and 1600 cc:
o ATL: Rs 12,500
o Non-ATL: Rs 37,500
5. Vehicles with engine capacity between 1601 cc and 1800 cc:
o ATL: Rs 18,750
o Non-ATL: Rs 56,250
6. Vehicles with engine capacity between 1801 cc and 2000 cc:
o ATL: Rs 25,000
o Non-ATL: Rs 75,000
7. Vehicles with engine capacity between 2001 cc and 2500 cc:
o ATL: Rs 37,500
o Non-ATL: Rs 112,500
8. Vehicles with engine capacity between 2501 cc and 3000 cc:
o ATL: Rs 50,000
o Non-ATL: Rs 150,000
9. Vehicles with engine capacity above 3000 cc:
o ATL: Rs 62,500
o Non-ATL: Rs 187,500
Special Cases
For vehicles where engine capacity is not applicable, such as electric vehicles or vehicles valued at Rs 5 million or more, the FBR has set a flat rate for tax collection. In these cases, the tax rate is Rs 20,000.
Additionally, the FBR has introduced a depreciation factor for older vehicles. For each year that passes from the date of first registration in Pakistan, the applicable tax rate will be reduced by 10%. This policy encourages the registration of older vehicles by reducing the tax burden as the vehicle ages.
Incentives for ATL Compliance
The significant disparity between tax rates for ATL and non-ATL individuals serves as an incentive for taxpayers to maintain active tax compliance. Those on the ATL can enjoy significantly reduced rates, often paying only one-third of the tax rate compared to those who are not on the list.
Conclusion
The FBR’s latest tax rates for vehicle registration and transfer of ownership in the 2024-25 tax year offer clear benefits to those compliant with tax regulations, while imposing higher costs on non-compliant individuals. Vehicle owners are advised to review their tax status and ensure their inclusion on the ATL to benefit from the reduced rates when registering or transferring vehicle ownership in the upcoming tax year.
