Not long ago, Government actually revealed the fiscal year 2018-2019 budget. According to the new budget it was clearly mentioned the non-tax payers will not be able to buy vehicles. All those people who are eligible to pay tax and their name are not on the list of Active Taxpayers. They will be restricted from buying any new car.
According to PAMA, Pakistan Automotive Manufacturers Association the budget 2018-2019 need some urgent changes. They further added, if these changes are not made on an urgent basis, it may have adverse effects on the automobile industry. Adding on, this will further stale the car sales in the region.
A formal letter has also been written for Finance Minister Miftah Ismail. In the letter, Abdul Waheed Khan, Director General PAMA clearly wrote that new budget clause will affect car sales. Therefore, it is preferable that the addition of section 27C should be removed. At the moment, there are total of 1.2million non-taxpayers in the country. If this condition is imposed than only those people will be able to purchase the car, who are tax filers. As a result, the car sales will drop tremendously. The car sales have been hiking up to approximately 550000 units per annum. However, if this new clause is brought into practice then the car sales will drop immediately.
There are number of car manufacturers who are entering the local market. At the same time, they entrants are not much aware of this new policy. As a result, they might be hesitant to enter the market and may change their expansion decision. Moreover, there was a new proposal which was put forward. A proposal which may benefit government more than the current clause. According to the suggested proposal, the government should offer non-filers and filers different rates of tax. This new tax rates should remain valid for upcoming five years as this will encourage people to pay taxes. Particularly, because they will be paying less amount of tax on commercial and passengers vehicles.