ISLAMABAD – Supreme Court (SC) has ordered to reduce the taxes on thelocally assembled vehicles.

The Federal Board of Revenue (FBR) and the Ministry of Finance wereinstructed by the SC to reduce the taxes imposed on locally assembledvehicles from 33% to 25%.

Sales Tax, customs duty, and income tax accumulate to an estimated 33% of avehicle’s retail value, confirmed an official of a major car manufacturingcompany.

A three-member bench heard the petition filed by Awais Ahmed, a socialmedia campaigner against car manufacturers. Ahmed, in his petition, statesthat local car manufacturers were charging unreasonably high prices, inpart because of high tax rates, while delivering low-quality vehicles tocustomers.

The court order read:

The court is convinced to the matter that the populace is being chargedwith unfair taxation and monetary charges, which are in contravention tothe existing financial rules.

But as contended by the learned counsel for the respondent (FBR) it isexpedient to charge such values to elevate the financial situation of thecountry.

The court, however, was not satisfied and convinced by the narrative thatthe tax rates were high due to Pakistan’s poor economic position, citingthat the country instead needed strong policies to improve the situation.

“We have asked for a reduction of taxes to 15%. We have cited examples oftaxation in the US, Canada, European countries and even India. We havebrought into notice the UN International Charter. We are expecting that itwould be reduced further,” said the petitioner’s lawyer, Farhan Azhar.