Pakistani automotive industry is flooded with the new automakers. Althoughit has been a positive development for the industry, people are stillyearning for more affordable cars in the market.
According to current news, the government is considering dropping taxes onvehicles with an engine transposition of 800cc or less in order to easepeople from the mid-tier socio-economic class. This decision will beconfirmed upon the depiction of the 2021 budget.
A proposal for this development is under progress, but the new policy seeksto reduce the import duties and taxes on the aforesaid category of cars byup 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 toseven percent.
Whereas the proposal suggests the abolishing of the 50 percent inregulatory duties, seven percent in customs duties, and 2.5 percent infederal excise duties. The offer draft also suggests a deferral of fivepercent 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 enginesupplanting.
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The report further states that currently, all the combined taxes and dutiesare about 132 percent on the new imported cars of the aforementionedcategory of the price of these cars. It highlighted that if the proposal isendorsed, the taxes will be reduced by 63 percent of the value of thesecars, which will provide the general public with more options.
It had been described on several times that the new auto strategy willrotate around cheap and environment-friendly cars to provide to the localmarket. Overall, the current proposal draft indicate a promising new stepfor the Pakistani automotive industry.
