According to simple mathematics, the experts believe that amnesty schemes announced and trumpeted in a manner as if it has brought in additional revenue whereas in fact it has only benefited some officials and tax evading citizens who should have been brought into tax net with penalties instead of amnesty.
According to the calculations, if 51000 vehicles were to be assembled in the country, regular taxes/revenues on an average would have crossed Rs25 billion. Currently the car makers are producing vehicles from 800cc to 1800cc in cars category while 2500cc mini truck is also being made which is very close to most of the smuggled categories.

As per the official figures of car manufacturers association, it pays on average a duty of 5000 USD including 16% GST, on every car if calculated combined from 800 to 2500cc. This makes a staggering figure of Rs 25 billion that FBR would have collected.
The shortsightedness of our revenue collectors could be judged from the fact that the citizens who availed the amnesty schemes were mostly those who had to buy a vehicle in any case, the schemes just brought a windfall for them.

According to source, FBR collections could have easily crossed Rs25.25 billion if all vehicles were small/economy vehicles. While in actual many vehicles were luxury vehicles, dumpers, trucks, buses, etc, which could have even contributed more in national kitty.

Sources said that these calculations do not include the impact that documented, employment generating, and technology based industry suffered while even having capacity available. The down stream industry which produces parts is likely to be another victim of this adhoc induction of one third volume of annual sale.

“The country requires a level-playing field, where the ‘protected stakeholders’ are also taxed similar to a common man,” stated Saqib Masood, the chairman Taxation Committee ICAP.

He emphasized that the perception of the tax burden is shared by every citizen of the country in an equitable way must be the foremost objective to increase the tax base. The final and fixed tax regimes introduced decades ago as ad-hoc measure, coupled with the frequently deliberated ‘amnesty schemess’ create negative perception about the whole taxation system in the eyes of the honest tax payer.

The long term objective of any tax policy must be to remove this perception at the earliest.Sources further revealed that vehicles getting registered from the amnesty are in extremely poor condition just touched upon to hide the damage etc due to mostly used on off road conditions in KPK, Baluchistan, Gilgit Baltistan and Kashmir. Most of the vehicles are repaired and meter tampered and profit margins extremely high for these smuggled vehicles.

It may sound fruitful that government has achieved its quarterly revenue targets but in long-term it will be realized that actually government have lost more than Rs 15 billion if the same number of units were locally sold.