KARACHI  - The Pakistan Automobile Assemblers Dealer Association (PAMADA) has asked the Federal Govt to avoid discrimination to local auto manufacturing industry and collect With Holding Tax on used cars at Import stage which will ensure the revenue collection and end disparity.

In a statement Chairman Pamada Iqbal Shah said that the government has lost over Rs 100 million in three months due to the ignorance of Federal Board of Revenue (FBR) as they could not collect withholding tax on imported used cars since July.

There are procedural issues with the systems of FBR by which they did not collect withholding tax from imported used cars since July and that resulted in the loss of over Rs 100 million to the national exchequer.

FBR had made two categories, tax filers and non-filers for the people registering their vehicles with the provincial departments. “For 850 CC vehicles, the FBR had asked us to receive Rs 10,000 as compared to Rs 7,500 earlier, on the vehicles of 2,000 CC and above, the rate is increased from Rs 50,000 to 150,000 and on 3,000 CC vehicles, it had been raised to Rs 250,000,” he said. For non-filers, the rates are Rs 10,000 for 850 CC vehicles, Rs 300,000 on 2000 CC and above whereas Rs 450,000 on 3000 CC vehicles.

Chairman Pamada Iqbal Shah has termed this a fatal blow to the national exchequer that is already facing heavy losses due to the imports of used cars by using illegitimate means. ‘This is strange that FBR supports elements who are damaging the national interest through the import of used cars which are on one hand eating up the market of new locally made cars while paying lesser taxes while on the other promote use of forged documents. It is beyond comprehension how come FBR failed to collect withholding tax from used vehicles,’ said Iqbal.

He said that during first quarter (July-September) 2014-15 cars sales decreased by 3.2pc as compare to same period last fiscal year due to increase in taxes and the government may face further loss in revenues while the segment which is not paying WHT at all were registered in higher number putting the local industry at huge loss as well as the Federal Govt’s tax collection efforts.