In an attempt to boost tax revenue and increase non-tax income, the Pakistan Business Council (PBC) has proposed the Federal Board of Revenue (FBR) to impose higher advance taxes on various sectors. The council’s recommendations primarily target non-filers and aim to generate additional funds for the government’s development initiatives.
One of the key proposals put forth by the PBC is to increase the annual advance income tax amount for owners of vehicles with an engine capacity of 2000cc and above who are non-filers. The council suggests raising the amount to Rs250,000 per year.
Additionally, the PBC argues for an increase in advance income tax levied on non-filers for the purchase of cars, as outlined in section 231B.
The proposed changes in advance income tax for different engine capacities are as follows:
Engine capacity: 1800cc – 2000cc
Existing tax: Rs600,000
Proposed increased tax: Rs2,000,000
Engine capacity: 2001cc – 2500cc
Existing tax: Rs900,000
Proposed increased tax: Rs2,500,000
Engine capacity: 2501cc – 3000cc
Existing tax: Rs1,200,000
Proposed increased tax: Rs3,000,000
Engine capacity: Above 3000cc
Existing tax: Rs1,500,000
Proposed increased tax: Rs4,000,000
Furthermore, the PBC suggests raising the advance income tax from Rs1,200,000 to Rs2,400,000 on the sale of vehicles with an engine capacity of 2001cc and above by non-filers before registration.
In addition to the proposed changes in vehicle-related taxes, the PBC recommends increasing the advance tax collected from domestic connections in the name of non-filers.
Currently, non-filers with monthly utility bills of Rs25,000 or more are subject to a 7.5 per cent advance tax. The council suggests continuing this practice and exploring the possibility of imposing withholding tax on withdrawals exceeding Rs50,000 in a single day from non-filer bank accounts.
According to sources within the FBR, the board has decided to increase the petroleum development levy from Rs50 to Rs60 per unit, which is expected to generate revenue of Rs870 billion. The government aims to increase non-tax income to Rs2.9 trillion through such measures.
It is worth mentioning that the proposed measures are intended to create additional funds for various government initiatives. One such initiative involves increasing pensions by up to 30 per cent, which would require Rs780 billion in funding.
The PBC’s recommendations, if implemented, would significantly impact non-filers and luxury expenditures. These proposed changes seek to address the revenue deficit and support the government’s efforts to strengthen the economy and promote sustainable development in Pakistan.
