ISLAMABAD: Those willing to purchase or import new vehicles are left with no options but to become filers as the assemblers, after failing to convince the government for removing new conditions, have requested its thousands of customers to become tax return filers.
Last month, while presenting the budget for 2018-19, the government barred non-filers from purchasing property that had a declared value of over Rs4 million and it also put curbs on them from buying new motor vehicles if their names did not feature in the active taxpayers’ list (ATL) of the Federal Board of Revenue (FBR).
After the announcement of Federal Minister for Finance, Revenue and Economic Affairs Miftah Ismail that the bar on non-filers of tax returns from purchasing motor vehicles will not be withdrawn, the assemblers have also started requesting customers to become filers first before going for booking a new car.
After the announcement by Toyota, Suzuki, on Tuesday has also announced suspending the bookings of individuals who are not filers as required in the new law.
In a notice to all its dealers, Suzuki on Tuesday (May 22) has informed that as the Finance Bill 2018-19, prevents non-filers of income tax returns from booking and registering vehicles with effect from July 1, 2018, the company considers to stop booking of all Suzuki vehicles for all non-filers customers including individual and all corporate customers with immediate effect i.e.May 22, 2018. The dealers are asked to inform sales teams and prospective customers.
The said a clause in the Finance Bill says, ”Any application for booking, registration or purchase of new locally manufactured motor vehicles or for first registration of an imported vehicle shall not be accepted or processed by any vehicle registering authority of excise and taxation department or a manufacturer of motor vehicle respectively unless the person is a filer.”
Earlier, Toyota, through an announcement in the press, has informed its customers that the government has recently introduced a new policy in order to restrict all non-filers from purchasing locally manufactured and imported vehicles. This includes all individuals whose names do not appear in the ATL as well as those customers who have already booked a vehicle and expecting delivery after June 30, 2018.”
To avoid any possible delivery delays or cancellation of vehicle orders, we would like to request all of our customers to ensure that they change their status as tax-filers,” it said.
However, the non-filers can still purchase vehicles but pay a premium to investors, the illegal business already in practice in the country (‘on money’), sources claim.
According to sources, the assemblers, who could not convince the finance minister Miftah Ismail for removing the condition, are also considering to knock the doors of courts as they may face losses in terms of sales. The condition, as sources in the auto industry claim, will also promote the menace of premium/’on money’ as an overwhelming majority of people in the country are non-filers.
“The condition set by the government is also likely to encourage investors, profiteers and individuals being filers to purchase vehicles and resale them on higher prices to non-filers,” said the sources.
The auto sector has already shown its reservations over the government’s decision. Stakeholders say that this will encourage investors to buy cars and sell them on premium to non-filers. According sources in the auto sector the condition will jeopardise the efforts to counter the menace of premium, as the decision will motivate investors to buy cars and sell to non-filers on a hefty premium.