Pakistan's tax authority to acquire 1,010 Honda City vehicles

Pakistan's tax collection authority — the Federal Board of Revenue (FBR) — has issued a letter of intent to acquire 1,010 Honda City vehicles over a period of five months.

The FBR will pay Honda Atlas Cars PKR 3.0 billion upfront, covering payment for 500 vehicles and partial payment for the remaining 510 units.

The government's recent decision to purchase a fleet of new vehicles has sparked significant public backlash. Critics argue that while the administration is advocating for fiscal austerity and pension reforms, it is simultaneously incurring substantial expenses on new vehicles.

An analyst highlighted that the majority of tax collection, whether direct or indirect, happens at the source. This raises questions about the need for such an extensive fleet of new vehicles.

Additionally, it appears that Public Procurement Rules have not been followed, as another manufacturer reportedly offered lower rates for vehicles with similar capacity.

The acquisition will be executed in two phases. In the first phase, 75 vehicles will be delivered in January, followed by 200 in February, and 225 in March. The second phase will see 250 vehicles delivered in April, and the final 260 in May.

An official from the FBR stated that the acquisition is a significant part of the organization's ongoing transformation plan to enhance operational efficiency. The vehicles will be utilized to boost the efficiency of field officers.

According to the FBR’s letter, the vehicles will come with several enhancements, including a navigation system with a reverse camera, a high-grade interior, and free periodic maintenance for up to 20,000 km or 12 months.

Additionally, the purchase price includes a fourth-year extended warranty, offering coverage for up to four years or 100,000 km, subject to regular maintenance at authorized dealerships.

Furthermore, the FBR has instructed that logos be placed on both the front doors and the front windscreen of the vehicles.

In December, the FBR collected PKR 1.326 trillion, falling PKR 47 billion short of the PKR 1.373 trillion target. Despite this shortfall, the collection marked a 35% increase from the PKR 984 billion collected in December 2023.

For the first half of the fiscal year (July–December 2024), the FBR amassed PKR 5.623 trillion, which was PKR 386 billion below the PKR 6.009 trillion target. Nevertheless, this represented a 26% rise from the PKR 4.466 trillion collected during the same period in 2023.