Karachi: The Federal Board of Revenue (FBR) has initiated a drive to identify income sources of luxurious vehicles’ owners to ensure their tax return filings, confiscating vehicles on non-compliance, official sources said on Thursday.
The sources said tax officials are obtaining data of registered motor vehicles above 1,000cc to determine the sources of income of their owners to increase filings of tax returns.
They told The News that Inland Revenue asked local car assemblers and customs authorities to share the last five-year data of purchased vehicles with the tax department.
“We are comparing this with the data provided by the provincial motor vehicle registration authorities,” said a source.
The sources said the FBR has started issuing notices to the owners of vehicles and around 422 vehicles have been seized on non-compliance.
Motor vehicle registration authorities of various cities have so far shared data of 821,000 registered vehicles above 1,000 CC, while Indus Motors Co Limited, Pak Suzuki Motors Co Ltd and Honda Atlas Motors Ltd have provided the details of 73,200, 153,700 and 45,000 vehicles, respectively.
The sources said the customs department will also provide the details of vehicles imported during the past five years, including those cleared under the amnesty scheme announced in 2013.
They said a number of smuggled vehicles are being used, especially in rural areas.
An official at Regional Tax Office (RTO) Karachi said vehicles were also cleared on fake identity for which customs authorities are responsible.
The customs cleared around 51,200 vehicles under the amnesty scheme 2013 and earned the FBR Rs16.2 billion as duty and taxes.
“The amnesty was granted on clearance and a vehicle owner is required to file income tax returns and declare source of income,” said the source.
However, the FBR failed to identify the real ownership due to apathy of customs department fraught with corruption and misconduct.
The Federal Tax Ombudsman, in 2014, released a detailed report on irregularities in clearance of imported vehicles.
“Granting amnesty to smuggling is counterproductive as it promotes smuggling, emboldens smugglers and contributes to black economy,” the report said.
It further said luxury vehicles were mostly smuggled to cater to the upper class, adding that therefore the amnesty was more undesirable and against the national interest.
“Apart from the conceptual irrational and counter-productivity of amnesty for smuggled vehicles, the amnesty scheme 2013 was allegedly misused for corrupt motives by the customs staff for regularising such vehicles as had either not yet arrived in the country or these were not physically presented or actually seized by the customs,” the report said.
Besides, many tampered and stolen vehicles might have been granted amnesty due to weak or non-checking of tampering and absence of any filer for stolen vehicles, it said.
“It will be difficult to cross-match the data of imported vehicles with those registered with the provincial authorities in such as scenario,” said a source in the Inland Revenue.