Cars prices in Pakistan to witness decrease in federal budget 2021 - 22
Pakistani automotive industry is flooded with the new automakers. Although it has been a positive development for the industry, people are still yearning for more affordable cars in the market.
According to current news, the government is considering dropping taxes on vehicles with an engine transposition of 800cc or less in order to ease people from the mid-tier socio-economic class. This decision will be confirmed upon the depiction of the 2021 budget.
A proposal for this development is under progress, but the new policy seeks to reduce the import duties and taxes on the aforesaid category of cars by up to 63 percent, and only for the new imported cars. On the other hand, the plans for the locally developed vehicles are to decrease the taxes to seven percent.
Whereas the proposal suggests the abolishing of the 50 percent in regulatory duties, seven percent in customs duties, and 2.5 percent in federal excise duties. The offer draft also suggests a deferral of five percent on withholding tax, and a reduction in the standard sales tax (GST) from 17 percent to 12 percent on the import of cars with up to 800cc engine supplanting.
The report further states that currently, all the combined taxes and duties are about 132 percent on the new imported cars of the aforementioned category of the price of these cars. It highlighted that if the proposal is endorsed, the taxes will be reduced by 63 percent of the value of these cars, which will provide the general public with more options.
It had been described on several times that the new auto strategy will rotate around cheap and environment-friendly cars to provide to the local market. Overall, the current proposal draft indicate a promising new step for the Pakistani automotive industry.