Tuesday, December 31, 2013

Vehicle Ownership Transfer Tax

There is considerable discussion happening on the sudden re-emergence of the issue of levying 5% tax on transfer of ownership of vehicles. For the record, the PDP government is not responsible for this rule. The government during whose tenure this rule was promulgated must assume the responsibility.

However, playing the blame game is not the answer. I read somewhere that the Hon’ble Prime Minister had come on BBS TV to state that his government is not responsible. That isn’t the point. The point is: Does he and his government feel that this ridiculous rule is unfair and self-defeating? If yes, then his government should do something to rectify it.

Two years back I had complained to the then DPT Minister of Information & Communications - stating that there was no rationale behind levying such high tax on transfer of ownership of vehicles. In fact I said that the transfer fee cannot be called a tax. I also opined that it was not correct that the RSTA should levy the tax based on what they call the “depreciated value of the car” at the time of sale. How often does it happen that a vehicle is sold based on the depreciated value?

I expressed the view that only an idiot would be willing to pay such high tax. Obviously, the government felt that it was one way to generate income for the RSTA. However, as it now turns out - as I correctly predicted - the government did not generate any income from this. On the other hand, lot of people who would have been willing to pay the fee, refused to pay the tax - thereby causing substantial loss of income.

Why not call it an “Administrative Fee” and decide on a lump sum figure of say …. Nu.2,000.00 or Nu.2,500.00 per incidence? I am sure every one will be willing to pay this amount of reasonable fee.

Talking of which, how is the RSTA going to effect transfer of the illegal transactions? Even at 5% tax?

Come to think of it, is there really a rule/law that makes it mandatory upon the seller/buyer to effect the transfer of ownership .... or does the rule/law merely state a rate of tax to be levied ... if and when a seller/buyer decides to change the ownership?

1 comment:

  1. I hope there is existing rule in place. I certainly paid tax whenever I made vehicle purchase deal within the country. If there is no rule, then it must be refunded. I am certain the rule is in place, and some officials may have overlooked and slept for more time. Anyway, they must be awake now. All the best.