The Pakistan Business Council (PBC) has urged the Federal Board of Revenue (FBR) to introduce a cap on individual vehicle ownership, limiting registrations to a maximum of 10 cars per person.
The aim of the proposition is to reduce benami transactions, an illegal practice in which individuals register vehicles under multiple names in order to conceal assets and evade taxation.
Currently, Pakistan does not have a law that governs the number of vehicles that an individual may register. According to the PBC, individuals and organizations are exploiting this vulnerability by purchasing numerous vehicles and registering them under the names of fictitious or proxy individuals.
This practice, which is also known as benami ownership, allows individuals to circumvent taxes, conceal wealth, and even employ vehicles for money laundering.
The PBC proposed a limit of 10 vehicles per individual in order to resolve this matter. This implies that no individual should be permitted to register more than ten vehicles in their name throughout Pakistan. The PBC is of the opinion that the rule will:
This prohibition will not affect buyers or companies that require vehicles for business, according to PBC. Rather, it will be directed at those who are abusing the system to evade taxes and conceal assets.
Additionally, the council suggests that this measure be implemented in conjunction with routine audits and improved digital monitoring systems to further regulate car registrations.
The PBC suggests that the FBR collaborate with the Excise and Taxation Departments throughout Pakistan in order to enforce this policy. The following are some of the recommended measures:
The PBC is of the opinion that this proposal will improve financial accountability and prevent tax evasion in the automotive industry. The FBR is now responsible for determining whether or not to incorporate this recommendation into the 2025-26 budget.