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Non-filers will have to pay Rs20,000 more for a Honda City

January 24, 2019
 
Non-filers will have to pay Rs20,000 more for a Honda City

The government is making non-filers pay more than double the tax paid by filers

If you are a non-filer and celebrating the news that the government has allowed you to purchase vehicles with an engine capacity up to 1300cc, here is something that might spoil your mood. You will now pay more than double in taxes compared to those who have filed their tax returns.

In Wednesday’s supplementary budget, the government has penalised non-filers by increasing the tax rate and benefitted those who have filed their tax returns.

To put it plainly, this means you will now pay Rs60,000 in tax on a 1300cc car, like a Honda City or Suzuki Swift, as opposed to the Rs40,000 you were paying under the previous tax policy. This is more than double the amount (Rs25,000) filers pay for the same car.

Engine  capacity Tax on filers (Rs) Tax on non-filers (Rs)
800cc 7,500 15,000
1000cc 15,000 37,500
1300cc 25,000 60,000

Similarly, non-filers will pay Rs37,500 on 1000cc car, such as Wagon R, up from Rs25,000 before the budget was announced. Filers will continue to pay the old amount, which is Rs15,000 on a 1000cc car.

Related: Mini-budget: Govt makes high-end mobiles more expensive, allows non-filers to buy 1300cc cars

Previously, non-filers were not allowed to buy new cars. On Wednesday, the government removed this restriction, allowing them to buy vehicles with an engine capacity up to 1300cc. However, this relaxation comes with a price for non-filers. The government has also increased duties on imported luxury cars — those above 1800cc engine capacity — by up to 25%.

The government is doing this because it wants to bring more people under the tax net to increase its revenue. The government is facing a budget deficit (loss) of more than Rs2 trillion a year because it spends more than it earns. Taxes are the main sources of government revenue but because of massive tax evasion, the government is unable to increase its income. Pakistan has one of the lowest tax-to-GDP ratios (12%) in the region and only 1.4 million people file their income tax returns.

 
 
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6 Comments

  1. Avatar
    Wahid baaz   January 25, 2019 4:27 am/ Reply

    To encourage people to file tax return was better to not allow non filers to purchase new cars. This way the filers could have been rewarded by selling their a year old used car to non filers for same or slightly higher than what they initially paid.

  2. Avatar
    Sajid   January 25, 2019 11:02 am/ Reply

    Please be noted that non filers still wont be able to buy a honda city as it comes with a 1324cc engine. And right now WHT on honda city is 50000 for filers.

  3. Avatar
    Zulfiqar Shaikh   January 25, 2019 4:08 pm/ Reply

    Mr. Said is absolutely correct.

  4. Avatar
    Faisal   January 25, 2019 8:30 pm/ Reply

    The amont of tax on purchase of 1300 car should be atleast Rs. 100,000/-.

  5. Avatar
    Danial Qazi   January 26, 2019 4:18 pm/ Reply

    Honda City fall above 1300cc category.

  6. Avatar
    Saad   January 27, 2019 2:29 pm/ Reply

    Non filers won’t be able to purchase honda city or suzuki swift as it comes in 1324-28cc and non filers can buy upto 1300cc but yes the good news is that non filers can buy Toyota Corrola (GLI/XLI) as it is 1298cc

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