Sales Tax Has Been Reduced To 12.5% From 17%. Now, The Government Is Considering Extending This Tax Relief For Cars Up To 1,000cc.
On the 11th of June, the federal government announced the Fiscal Budget 2021-22. For the first time, car prices have gotten cheaper in an annual budget. The government has ended Federal Excise Duty (FED) for cars under 850cc, while Sales Tax Has Been Reduced To 12.5% From 17%. Now, The Government Is Considering Extending This Tax Relief For Cars Up To 1,000cc. Here are the details.
Federal Minister for Finance and Revenue, Shaukat Tarin, chaired a meeting on Friday. In the meeting, the Federal Minister for Industries and Production, Makhdum Khusro Bakhtyar, gave a detailed briefing on the new auto policy. Commerce Adviser Abdul Razak Dawood and SAPM on Finance and Revenue Dr Waqar Masood also attended this auto policy review and finalization meeting.
Objectives of The New Auto Policy
The Minister for Industries and Production briefed the meeting that the aim to introduce a new policy is to
- provide affordable small cars (850cc – 1000cc)
- promote localization in domestically assembled cars
- export auto-parts of 2-3 wheelers
- increase the competition in the local market
All this will ensure that people in Pakistan can enjoy better technology at affordable prices. An official of the Ministry of Industries and Production (MoIP) said that there are limited cars below 850cc. Enhancing the engine capacity up to 1,000cc would be beneficial for the customers and the industry. Hence, the federal government should consider extending the tax relief for cars up to 1,000cc. This way, the auto manufacturers in Pakistan would launch more small cars for the consumers.
Other matters were also discussed in the meeting, such as concessions for electric vehicles to increase EV car imports and non-payment of Additional Customs Duty (ACD) by the auto sector. Do you think taxes on cars up to 1,000cc will get lower in Pakistan? If yes, how would that benefit the auto companies and the consumers? Share your views in the comments.
This news was originally published at Pak Wheels.