LAHORE: Due to a decrease in the production of cars and motorbikes, the Excise Taxation and Narcotics Control (ET&NC) department is facing a shortfall in the collection of revenue from this sector as it merely collected Rs3.9 billion against in the first half of the ongoing fiscal year.
The department’s target for the fiscal year 2019-2020 is Rs9.1 billion from the registration of motor vehicles whereas last year (FY2018-19), the target was the same and was smoothly achieved by the department.
During the first six months of the last fiscal year, the department registered 48,000 cars, 87,000 motorcycles whereas in the first six months of the ongoing fiscal year, it registered 32,000 cars and 43,000 motorcycles and nearly 1,000 commercial vehicles.
On the condition of anonymity, an official of the excise department told Pakistan Today that this year there was a decrease in the sale and production of vehicles because the demand has decreased owing to the high prices of cars and motorbikes. “People who purchase new cars have to declare them as their assets as the Federal Board of Revenue (FBR) constantly keeps a check on new purchases. Nowadays, people prefer used cars because they only have to pay token tax and transfer fee,” the official said.
According to Pakistan Automotive Manufacturers Association (PAMA), 60,862 cars of different categories were produced in the first six months of FY20 and out of these 59,097 were sold. Last year, 113,494 cars were produced and out of these 104,038 were sold.
A breakdown of this figure reveals that 18,974 passenger vehicles were produced in the first six months of FY20 whereas 19,797 passenger vehicles were sold during the same period. Similarly, 13,470 cars with engine capacity of 1,000CC were produced and out of these 11,155 were sold. Moreover, 28,417 cars with an engine capacity lower than 1000CC were produced and 28,145 were sold.
PAMA also shared the statistics of commercial vehicles. According to the data, 1,729 trucks were produced and 1,691 were sold, 326 buses were produced and 373 were sold. Last year, 515 buses were produced and 546 were sold in the same period. Similarly, 809,607 motorbikes and rickshaws were produced during the current year and out of these 799,820 were sold. Last year, 914,860 were produced and 909,560 sold.
Speaking to Pakistan Today, ET&NC Region C Director Rana Qamarul Hussain Sajjad said that it was very difficult for the department to meet the targets in the ongoing fiscal year because of a decrease in the production of cars and motorbikes. “Last year, we achieved the target of Rs9 billion but this year this seems unlikely,” he added.
It is worth mentioning here that this is not the only sector that is affecting the excise department’s revenue. The department is facing a revenue shortfall due to decreasing liquor sales as well.