Motor vehicle tax collection grows 50% in FY21
KARACHI: The collection of motor vehicle tax has registered a 50 per cent increase in the fiscal year 2021, owing to substantial increase in sales of vehicles during the year under review.
The tax collection under this head increased to Rs14.38 billion during the fiscal year 2020/21, compared with Rs9.86 billion in the preceding fiscal year, according to the data released by the Ministry of Finance this week.
The provincial governments have a mandate to collect the tax on various slab basis.
The sales of locally manufactured cars increased 62 per cent to 181,397 units in the fiscal year 2020/21, compared with 111.965 units in the preceding fiscal year. The figures are reported by the members of the Pakistan Automobile Manufacturers Association.
However, analysts believed that Pakistan’s total car sales increased 90 per cent in 2020/21 including the figures of non-PAMA and imports.
The analysts at Topline Securities attributed the growth in car sales to low base effect due to the Covid-19-linked lockdowns in 2019/20.
According to details issued by the federal Finance Ministry, the collection of motor vehicle tax by Punjab stood at Rs14.38 billion in the fiscal year 2020/21, compared with Rs9.86 billion in the preceding fiscal year.
The motor vehicle tax by Sindh posted 59 per cent growth to Rs9.86 billion, compared with Rs6.18 billion. Meanwhile, Khyber-Pakhtunkhwa and Balochistan authorities recorded growth in tax collection at 28.57 per cent and 41 per cent, respectively.
The analysts believed that car sales would touch 300,000 units in the current fiscal year driven by low interest rates; launch of new models; and reduction in car prices through lower taxes.
The higher car sales will also result in more motor vehicle tax in the current fiscal year.
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