KARACHI, Oct 27: Registration of new cars declined by 40 per cent to 10,145 in the first quarter of current year against 17,057 in the same quarter last year.

The high rate of decline has been attributed partly to the prevailing economic slowdown and high incidence of taxes imposed in the current year budget.

The total number of registered vehicles in the period under review is down by 26 per cent to 40,665 compared to 55,074 vehicles in the corresponding period last year.

The number of motorcycles registered in the same period was 28,578 against 35,938, registering a 20 per cent decrease. The number of registered commercial vehicles rose by seven per cent to 1,940 against 2,079 in the previous quarter.

Giving the figures, director, motor vehicle registration (MVR), Shoaib Siddiqui, told Dawn that the registration of vehicles and tax payment procedures have been streamlined to facilitate taxpayers.

The department is clearing its shelves from heaps of files and has started scanning registration data to preserve it in a soft form. It will return about 1.7 million files to owners to create space in the office premises.

The MVR has also improved printing of challans and tax receipts with a new printer, which has eliminated complaints of poor legibility of these important vouchers.

Meanwhile, Chairman, All-Pakistan Motors Dealers Association, H M Shahzad, said that the registration of vehicles has declined due to multiple taxes and high rate of luxury tax on vehicles.

He said that the Sindh excise department is charging Rs100,000 luxury tax on big cars, while Rs12,000 to Rs50,000 is being charged as withholding tax on imported used cars of different engine powers.

Mr Shahzad pointed out that the importers of used cars were paying withholding tax at import stage, yet the MVR is charging WT at the rate of 2.5 per cent at the registration.

He said that the FBR through a letter to the association has directed the excise department that the WT should not be charged on registration if the same has been paid on import stage.

The association has dispatched copies of this letter to the minister and secretary excise and taxation but to no avail.

He pointed out that WT was introduced in the new budget for registration of only locally assembled new cars and not on imported used cars.

Mr Shahzad said that as a result of this double taxation, importers of used cars were diverting their vehicles for registration in Balochistan and NWFP where there is no such tax.