No refund on AIT for car registration, fitness renewal

The government has scrapped refund of advance income tax paid by the private car owners on occasion of registration and renewal of fitness of their vehicles, from the next fiscal year.
The National Board of Revenue incorporated a provision in the Income Tax Ordinance-1984, through the proposed Finance Bill 2016, cancelling the reimbursement facilities.
The national budget was placed by finance minister AMA Muhith before the House on Thursday.
The provision says, ‘the advance tax paid for the purpose shall not be refundable’.
The rates of tax, however, remained unchanged for the next FY, 2016-2017.
In addition, educational institutions entitled to Monthly Payment Order, has been exempted from paying of the tax for owning motor vehicles, primarily, cars and microbuses.
Officials of the revenue board said additional portion of the advance tax– paid during registration or renewal of private cars– was subject to reimbursement by adjusting with the owner’s income tax in the following year.
It’s over now, they said.
A taxpayer will pay fixed amount of AIT based on the cylinder capacity of his/her car even though the annual income of the owner is below the taxable limit or his/her tax liability remains below the AIT, fixed for cars.
‘Where a person pays advance tax for a car or a microbus and the income from regular sources of the person results in a tax liability less than the said advance tax, the income of such person shall be deemed to be the amount that results a tax liability equal to the said advance tax,’ according to the provision of the bill.
A taxpayer will be able to adjust the advance paid tax with his or her total payable tax if the payable tax amount turns higher but he/she will not get refund or cannot even carry forward the additional tax amount with the payable tax the next year, a high official of the NBR told New Age.
He said generally it does not seem believable that the tax amount for a car owner is less than the amount of AIT fixed for a car based on the engine capacity, if car maintenance, including cost of fuel and salary of the driver– all are considered together.
But in many cases, car owners show no income or much less income and take refund every year, he added.
Car owners have to pay the AIT at the time of registration or renewal of fitness at Bangladesh Road Transport Authority facility.
As per the finance bill, an owner of a car or a jeep up to 1,500cc will pay Tk 15,000, for a car or a jeep from 1,500cc to 2,000cc, will pay Tk 30,000, for 2,000 cc to 2,500 cc car or jeep, the AIT is Tk 50,000, for 2,500 cc to 3,000 cc car or jeep Tk 75,000, for 3,000 cc to 3,500 cc Tk 1 lakh, for car or jeep above 3,500 cc, Tk 1.25 lakh and for a microbus the AIT is Tk 20,000.
There are some other persons and entities, such as government and local government, a project, programme or activity, under the government and local government, foreign diplomat, diplomatic mission, United Nations and its offices, development partners and their affiliated offices, public universities and gazetted war-wounded freedom fighters will enjoy tax exemption.

News Courtesy: www.newagebd.net