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Withholding tax imposed on motor vehicle sale to discourage ‘on money’

ISLAMABAD: The federal government has approved an additional withholding tax on motor vehicles sold within 90 days of delivery in order to discourage ‘on money’ trend, sources said on Wednesday.

The federal cabinet in its meeting on February 09, 2020 approved the Tax (Amendment) Ordinance, 2021 to implement through a presidential ordinance.

The sources said that through the Tax (Amendment) Ordinance, 2021 withholding tax on vehicles had been imposed in case the motor vehicle was sold within 90 days of delivery.

The tax has been imposed in order to discourage investors and ‘on money’ trend.

The levy has already been approved by the economic coordination of the cabinet.

The sources said that the withholding tax will be applicable after promulgation of the ordinance.