By Staff Reporter
ISLAMABAD: The government has raised the advance income tax on vehicles above 2000cc and imposed a fixed tax on imported and locally manufactured vehicles from 2001cc to above 3000cc under the amended Finance Bill 2023, according to a document issued by the Federal Board of Revenue (FBR).
The document also revealed new income tax slabs for the salaried class and other individuals and associations of persons (AOPs), with higher rates applicable where annual taxable income exceeds Rs2.4 million.
Under the new vehicle tax regime, the fixed rate of tax would be 6 percent of the value of a vehicle with engine capacity of 2001cc to 2500cc, 8 percent for 2501cc to 3000cc and 10 percent for above 3000cc.
The advance tax would be collected by the motor vehicle registering authority of Excise and Taxation Department at the time of registration, transfer or sale of a motor vehicle, except for vehicles older than five years from the date of first registration in Pakistan.
The advance tax would also be collected by the manufacturer of a motor vehicle at the time of sale of a car or jeep.
The new income tax slabs for the salaried class showed that where taxable income exceeds Rs2.4 million but does not exceed Rs3.6 million, the rate of tax would be Rs165,000 plus 22.5 percent of the amount exceeding Rs2.4 million.
Where taxable income exceeds Rs3.6 million but does not exceed Rs6 million, the rate of tax would be Rs405,000 plus 27.5 percent of the amount exceeding Rs3.6 million.
Where taxable income exceeds Rs6 million, the rate of tax would be Rs1.095 million plus 35 percent of the amount exceeding 6 million rupees.
The income tax rates for other individuals and AOPs ranged from 7.5 percent to 30 percent, depending on the taxable income bracket.
Under the new slab for individuals/AOPs where taxable income exceeds Rs4,000,000, the rate of tax would be Rs765,000 plus 35 percent of the amount exceeding Rs4,000,000.
The FBR also increased the rate of “further sales tax” from 3 percent to 4 percent on supplies made to unregistered persons, a move aimed at documenting the sales tax sector.
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