FBR Announces Increased Tax Rates for Non-ATL Individuals Registering Vehicles

Key points:

FBR has announced a 200% increase in tax rates for individuals not on the Active Taxpayers List (ATL) at the time of motor vehicle registration in FY 2023-24.

 

Higher tax rates will be imposed under section 231B of the Income Tax Ordinance 2001.

 

For imported vehicles, tax will be based on import value including customs duty, FED, sales tax.

 

For locally made vehicles, tax will be based on invoice value including all duties and taxes.

 

For auctioned vehicles, tax will be based on auction value including all duties and taxes.

 

For vehicles valued over 5 million rupees, tax rate is 3% of value including duties and taxes.

 

Rationale is to encourage tax compliance and bring more individuals into the tax net.

 

It aims to penalize those not declaring income/assets and boost revenue collection.

 

This move provides a strong incentive for taxpayers to ensure they are on ATL and comply with tax laws in FY 2023-24.

The Federal Board of Revenue has announced a significant increase in tax rates for individuals who are not on the Active Taxpayers List at the time they register a motor vehicle in the upcoming fiscal year 2023-2024. Specifically, tax rates will be doubled under Section 231B of the Income Tax Ordinance.

 

The value used to calculate taxes will depend on whether the vehicle is imported, locally manufactured, or auctioned. For imported vehicles it will include import costs, duties and taxes. For locally made vehicles it will include the invoice amount plus all costs. And for auction purchases it will include the auction price plus associated fees.

 

S. No.	Engine Capacity	Filer	Non-Filer
1	Upto 850CC	Rs 10,000	Rs 30,000
2	851CC to 1000CC	Rs 20,000	Rs 60,000
3	1001CC to 1300CC	Rs 25,000	Rs 75,000
4	1301CC to 1600CC	Rs 50,000	Rs 150,000
5	1601CC to 1800CC	Rs 150,000	Rs450,000
6	1801CC to 2000CC	Rs 200,000	Rs 600,000
7	2001CC to 2500CC	6% of the value	18% of the value
8	2501CC to 3000CC	8% of the value	24% of the value
9	Above 3000CC	10% of the value	30% of the value

There is also a 3% tax rate floor for vehicles valued over 5 million rupees that takes into account import/production costs and duties/taxes.

 

The FBR hopes this will encourage more people to properly file and pay their taxes to avoid the penalties. The goal is to bring non-compliant taxpayers into the system and generate more revenue through penalizing those who do not report income or assets.

 

With these higher tax rates for non-ATL individuals, there is a strong incentive for taxpayers to ensure they are on the Active Taxpayers List and in compliance for the upcoming fiscal year to avoid extra costs when registering a vehicle.

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