MOTOR VEHICLE TAX
By AZAM ALI
June 21 - 27, 2004
The Motor Vehicle Tax (MVT), which contributes around Rs4 billion a year has a great potential to yield more provided proper arrangements were made for its collection instead of leaving at the will of the corrupt people throughout the country.
There was an ideal plan for collection of MVT by adding it to the fuel bills at the petrol pumps but its implementation has been delayed for the reasons best known by the authorities.
However, the same idea has been adopted for collecting TV license fees through electricity bills. Scraping the scheduled plan of safe tax money flow from vehicle owners into the government exchequer has become a questionable as newly set up City Governments in the country given another financial jerk.
The owners of five million vehicles in all over country now would continue to face hardship of paying MV Tax manually, standing in long queues outside the designated bank Branches, putting tax stickers on the wind screen and also would come under the threats of traffic police during vehicle documents checking.
Three years long working both at provincials and federal level has been put in the cold storage just for political reasons on which huge amount was spent in order to collect 100% MV Tax. The plan had not only made to avoid tax evasion but to provide relief to all type of vehicle owners in entire country who face hardship and waste time to pay the MV Tax. Apart from safe tax collection the scraped out procedure would also have saved huge manpower, provincial governments money and office spaces too.
The Motor Registration Wing of Provincial Excise and Taxation Department in then Karachi Division took lead in mid 1998 when a computerizing tax collection system was adopted with three National Bank Branches on line scraping manual tax recovery. The tax collection amount gradually started going up from Rs. 40 million per year. More NBP branches were taken into line amount reached to over one billion rupees with seven NBP branches online on computer system apart from its head office in Civic Center. CPLC also took help from this Department in computerizing record for vehicles registration for immediate identification of owner and further details in order to reduce vehicle theft. Later other Divisions including Hyderabad, Larkana and Sukkur were connected with computerized system and Motor Tax recovery amount kept gradual going up. The Karachi Office crossed the target of Rs. 99 million with the recovery of Rs. 1.2 million.
The Provincial Government in Islamabad and some of senior officers of Federal Ministry of Interior noted the excellent idea of MV Tax collection and Motor Registration system and requested Mr. Parvaz the mastermind behind the concept to come Islamabad for assistance.
Following his innovative ideas and use of latest technology the Federal Government asked him to plan countrywide Motor registration system so that vehicle theft and registration of stolen vehicles could come to en end.
Later, another plan of collecting MV tax of all over country through petrol and diesel was developed and paper work started. Idea stated facing oppositions by corrupt officials when meetings of all provincial officers started for a consensus. However, paper work remained in progress and Federal Government decided in 2002 to scrap the manual collection of MV tax avoiding huge tax evasion.
Major opposition came from largest province Punjab where approximately 2.5 million vehicles of various type are registered. Balochistan has about 400,000 and NWFP has about 210,000 vehicles. Unregistered vehicles in both provinces are out of tax network.
The unnecessary exercise of vehicle owners of all type, private, commercial and public transport gives hardship of sparing time, maintaining record, keeping all the time tax record with vehicles and putting tax stickers on wind screen etc. not only this but credibility of tax receipts was also challenged by the Excise and Taxation department and Traffic police. The condition of law abiding and regular tax paying vehicle owner could be imagined when receipts issued by the department is declared fake and he or she is declared as tax evader.
Tax evasion had always been accepted by the authorities but very interesting details come into light when provincial Excise and Taxation was taken to task by Anti-Corruption Department after feeling their share low being a superior authority. They started confiscating Registration Books of vehicles owners who had their documents stamped by the department but the tax money had gone into the pockets of tax collecting officers instead of government account. The owners statements recorded by the anti-corruption department revealed that many of the commercial vehicle owners only used to pay the tax when they need transfer of ownership. If a vehicles owner had not paid tax for last five year he would pay only half of the money after which he could get his registration book stamped by the clerks of Excise and Taxation MV Department. This half of the money directly goes in the pockets staff instead of government account.
It is interesting to note that the provincial Excise and Taxation Ministries are the most attractive Ministries because of having MV Tax collection wing.
For the posting of even a junior clerk in the Department, one have to have the blessings of the provincial Minister of Excise and Taxation. For the positions of such as the directors, superintendents and Excise and Taxation Officers (ETOs), recommendations of Chief Ministers are prerequisites.