Govt to Collect 3% Advanced Tax on Registration of Electric Vehicles

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Govt to Collect 3% Advanced Tax on Registration of Electric Vehicles

When electric cars (E-vehicles) with a price tag of Rs. 5 million or more are registered, the government has decided to collect a 3 percent advance tax.

An expert on taxes explained the Finance Act 2023 and noted that the new legislation does not outline the advance tax rates for the registration of electric cars (E-vehicles). The tax rate for registering E-vehicles is not mentioned.

Finance Act 2023, on the other hand, said that the tax rate in situations when engine capacity was irrelevant and the vehicle’s worth was Rs. 5 million or above would be 3 percent.

According to the tax expert, the FBR should have included the registration of E-vehicles, but uncertainty has been caused. The Finance Act of 2023 specifies that the tax rate for electric vehicles would be 3 percent because they fall under the category of vehicles without engine capacity.

According to the Finance Act of 2023, the value must be between 2001 and 2500 cc and above 3000 cc for motor vehicles.

the customs officials in Pakistan determined that the import value of goods was higher due to customs duty, federal excise duty, and sales tax payable at the import stage;

local Pakistani manufacturing or assembly, with a total invoice amount that includes all taxes and tariffs;

auctioned, with the bidding price including all customs and taxes.

The Finance Act added that the rate of tax that can be collected is 3% of the import value, as increased by customs duty, sales tax, and federal excise duty, in cases where engine capacity is not relevant and the value of the vehicle is Rupees five million or more.

The government has imposed a fixed tax under the Finance Act 2023 on imported and domestically produced automobiles with a cc range of 2001 to 3000.

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