Locally manufactured cars in Pakistan to get expensive by Rs 200,000

The Economic Coordination Committee (ECC) recently approved the impositionof additional withholding tax (WHT) on the sale of newly-bought vehicles.The tax amount ranges from Rs. 50,000 to Rs. 200,000 and it will be imposedat the first registration of a new vehicle in the name of the second buyer.

The decision was given the go-ahead after the submission of a summary bythe Ministry of Industries and Production. Reportedly, the purpose of thetax is to discourage the car dealerships that were involved in charginghefty illegal premiums on the original manufacturers’ suggested retailprices (MSRP) of the vehicles.——————————

The ECC has approved the imposition of Rs. 50,000 WHT on 1000 cc or lesscars, Rs. 100,000 WHT on 1,000 cc to 2,000 cc cars, and Rs. 200,000 WHT onvehicles with an engine displacement of more than 2,000 cc. The additionalWHT will be charged to people who buy locally assembled cars fromautomakers and sell them within three months of delivery.

The WHT has reportedly been made applicable until June 2020 and will bemade mandatory for the long term following an amendment in the Income TaxOrdinance. However, this decision is subject to clearance by the federalcabinet.