Local Auto Assemblers Stop Selling Cars to Non Filers

The local auto assemblers have reportedly stopped taking booking of vehicles from all the ‘non-filers’ including individuals and corporate customers.

Last month, while presenting the budget for FY 2018-19, the government barred non-filers from purchasing property that had a declared value of over Rs 4 million and it also put curbs on them from buying new motor vehicles if their names did not feature in the active taxpayers’ list (ATL) of the Federal Board of Revenue (FBR).

Related: Budget 2018-19: Non Income Tax Filers Won’t be able to buy New Cars

The finance act stated:

“Any application for booking, registration or purchase of a new locally manufactured motor vehicle or for first registration of an imported vehicle shall not be accepted or processed by any vehicle registration authority of Excise and Taxation Department or a manufacturer of a motor vehicle respectively, unless the person is a tax filer.”

However according to sources, the non-filers can still purchase vehicles by paying a premium to investors, the illegal business already in practice (‘on money’) in the country for several years. The condition set by the government is likely to encourage investors, profiteers and individuals being filers to purchase vehicles and resale them on higher prices to non-filers.

Related: Budget FY 2018-19: Govt Slashes Customs Duty to 25% on Import of Electric Cars

The auto sector has already shown its reservations over the government’s decision, but were unable to convince the finance minister Miftah Ismail for removing the condition. According sources in the auto sector this condition will jeopardize the efforts to counter the menace of premium, as the decision will motivate investors to buy cars and sell to non-filers on a hefty premium.

Sources also indicate that auto assemblers are considering to knock the doors of courts as they may face huge losses in terms of sales. According to the industry executives, nearly 60% vehicle buyers in Pakistan are non-filers, while only about 40% are filers.

What is your opinion regarding this move? Let us know with your comments.

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