In the upcoming budget for 2023-24, the Association of Pakistan Motorcycle Assemblers (APMA) has asked the government to reduce the General Sales Tax (GST) from 18% to 15%.
Sales Tax on motorcycle assemblers
This tax cut would benefit motorcycle riders who are suffering as a result of the current high exchange rate of the US dollar.
Furthermore, APMA Chairman Muhammad Sabir Shaikh proposed that all new motorcycle dealers register for sales tax purposes. This would ensure proper tax collection and prevent industry tax evasion.
According to Shaikh, because motorcycles are classified as Third Schedule items for sales tax collection, registered dealers should be exempt from submitting monthly sales tax returns.
Instead, he proposed that businesses submit quarterly or semi-annual returns, reducing the administrative burden on them.
Another issue raised by the industry is the alleged misuse of withholding tax policies by Federal Board of Revenue (FBR) officials.
There have been allegations that FBR officials accepted bribes from motorcycle dealers in relation to the withholding tax issue for dealers with turnovers in excess of 100 million rupees.
Industry representatives propose that only manufacturers, importers, and wholesalers be registered as withholding agents to address this issue. This would prevent traders from abusing the system.
The motorcycle industry is important to the Pakistani economy because it provides affordable transportation to millions of people while also creating numerous job opportunities.
As a result, it is critical for the government to act quickly to protect the industry’s sustainability and address industry stakeholders’ concerns.
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