KP Excise Department Proposes to Tax NCP Vehicles

With an aim to eliminate the presence of non-custom paid vehicles from the province and bring them into tax net, the Khyber Pakhtunkhwa excise and taxation department proposed a plan. This effort is primarily focused on Malakand Division and the merged tribal districts, where the presence of NCP vehicles is particularly high.

The department has collected data on over 110,000 NCP vehicles in these areas, with the assistance of Malakand Levies and the police. This data, which includes vehicle owners’ details, chassis numbers, and registration numbers, has been fed into the department’s database. The Federal Board of Revenue (FBR) will use this information to determine the appropriate customs duty based on engine capacity.

Proposed Customs Duties

An official from the department shared that while they have proposed customs duties, the final decision rests with the FBR. He emphasized that this might be the last opportunity for NCP vehicle owners to register their vehicles by paying the necessary duties. If the duties are not paid, the vehicles could be confiscated.

The KP Excise Department recently briefed the provincial cabinet on this issue, highlighting the significant challenges posed by the increasing number of NCP vehicles. These vehicles not only evade taxes, causing substantial revenue losses for the government, but also distort the market for legitimate vehicles. Moreover, they contribute to road safety concerns and undermine fair competition within the automotive industry.

Past attempts to address this issue have shown that the problem is growing. For instance, a profiling campaign in 2017-18 identified 99,334 NCP vehicles in Malakand Division. By December 2023, that number had increased to over 102,000 in the division and tribal areas.

KP Excise Official Statement

To gather more information, PakWheels contacted the KP Excise and Taxation (E&T) Department. An official from the department confirmed that the plan is currently a proposal and that they are in the process of collecting data on non-custom paid (NCP) vehicles. The program is in its initial stages and will take sometime to get finalize.

In its proposals, the department suggested that one vehicle per CNIC should be regularized and recommended a bulk registration facility for bargain dealers, with an additional 10% duty for each vehicle. This plan aims to bring these untaxed vehicles into compliance and eliminate the concept of NCP vehicles altogether.