KP excise dept plans to bring non-custom paid vehicles into tax net

PESHAWAR: The Khyber Pakhtunkhwa excise and taxation department has compiled the data on over 110,000 non-custom paid (NCP) vehicles in Malakand Division and merged tribal districts to bring them into tax net.
The profiling exercise carried out with the help of the Malakand Levies and police was meant to determine custom duty on such automobiles, according to an official.
He told Dawn that the excise department had fed details of vehicle owners and chassis and registration numbers into its database for use by the Federal Bureau of Revenue to decide about duty based on engine capacity.
The official said the department had already proposed custom duty on such vehicles, but the final decision would be taken by the FBR.
“Ours is just a proposal. It’ll be the FBR’s call to determine duty rates,” he said.
The official said it was likely to be the last chance for NCP vehicle owners to register after the payment of custom duty.
“There won’t be any further waivers as authorities want to eliminate the concept of NCP altogether,” he said.
He said the failure to pay duty would lead to the confiscation of vehicles.
The documents available with Dawn show that the excise department briefed the cabinet on the matter last month.
They revealed a rise in the number of NCP vehicles in Malakand Division and tribal districts and said those smuggled automobiles posed a significant challenge to law-enforcement and revenue authorities and evaded taxes, causing revenue losses for the government and distorting the market for legitimate vehicles.
“Additionally, NCP vehicles contribute to road safety concerns and undermine fair competition in the automotive industry,” a document read.
The document also detailed the past attempts to gather data on NCP vehicles in the province and said in 2017-18, a joint profiling campaign by the excise, police and other law-enforcement agencies showed the presence of 99,334 vehicles in Malakand Division.
In Dec 2023, the department profiled 102,078 vehicles in the division and tribal areas on the orders of the provincial Apex Committee, according to the document.
In the proposals submitted to the cabinet for regularising profiled vehicles, it said that one vehicle per CNIC should be regularised, while all bargain dealers registered under the KP Motor Vehicles Centres and Real Estate Agents (Regulation of Business) Ordinance, 1983, should have the facility to register vehicles in bulk on payment of 10 per cent additional duty.
The department also said owners availing themselves of the scheme should not be allowed to sell vehicles for the next five years.
For vehicles with up to 800c engines, it proposed the custom duty of Rs100,000 each for income tax filers along with Rs15,000 registration fee. Similarly, Rs200,000 custom duty was proposed for vehicles up to 1000cc capacity along with registration fee of 20,000, and the custom duty of Rs350,000 along with Rs60,000 registration fee on vehicles up to 1500cc capacity.
Besides on vehicles up to 2000cc, the excise department also suggested Rs450,000 in custom duty and Rs80,000 registration fee, on vehicles up to the proposed custom duty was Rs550,000 and registration fee of Rs100,000 and those above 2500cc, Rs700,000 in custom duty and Rs200,000 in registration fee.
Meanwhile, Dawn has learned that the excise and taxation department profiled 111,509 vehicles in Malakand Division and merged tribal districts until August 11.
Of them, around 74,723 are from Malakand division, 21,927 in Khyber, Kurram, Mohmand and Orakzai districts, and 14,814 in North Waziristan and Upper and Lower South Waziristan districts.
Published in Dawn, August 13th, 2024