The federal government has decided to impose an additional withholding tax(WHT) on locally-assembled cars, effectively increasing their prices up toRs. 200,000 per unit, reported Business Recorder.link

This measure has been taken as a deterrent to ‘own money’, claims theMinistry of Industries and Production (MoIP). The ministry has taken noteof the frequent complaints about delayed delivery of vehicles bymanufacturers. This system of unnecessary delays results in the buyers ofcars paying additional payments known as ‘Own Money’.

To discourage this practice, MoIP has proposed this WHT on people who buylocally manufactured cars from original equipment manufacturers (OEMs) andsell them within 90 days of delivery. The newspaper reported that theministry is also proposing an additional WHT of Rs. 50,000 on the enginecapacity up to 1000 cc, Rs. 100,000 on up to 2000 cc and Rs. 200,000 onabove 2000 cc.——————————

This issue of ‘Own Money’ exploitation was raised in a cabinet meeting,where the attendees of the meeting, including the Prime Minister, were ofthe view that the import car policy must be reviewed to look into theprotection that has allowed the local assemblers to exploit consumers.

Federal Minister for Industries and Production Hammad Azhar pointed outthat the automobile industry had been facing difficulties due to theCOVID-19 situation, and that had led to this practice of ‘on money’exploitation again. He said that the situation would likely return tonormal considering that manufacturers were ramping up production.