25% sales tax imposed on locally manufactured vehicles

25% sales tax imposed on locally manufactured vehicles!

The development comes on Wednesday following the Economic Coordination Committee (ECC) of the Cabinet gave its nod to a proposal for increasing the sales tax on vehicles manufactured and assembled within the borders of Pakistan.

The decision was taken on the proposal presented by the Federal Board of Revenue (FBR), suggesting an elevation in the sales tax applicable to the auto sector, particularly on vehicles produced and assembled domestically.

As per the endorsed proposal, vehicles valued at Rs4 million or equipped with 1400 cc engines will be subject to a 25 percent sales tax.

This taxation structure is anticipated to persist in the upcoming budget, signaling potential implications for consumers as a result of the price hike.

The levying of a 25 percent sales tax on 1400cc vehicles is expected to have a direct impact on the pricing structure, leading to a potential surge in vehicle costs in Pakistan.

Additionally, the Finance Division sought approval for the Share Subscription Agreement (SSA) of the National Credit Guarantee Company Limited (NCGCL) from the ECC.

The ECC approved the proposal for signing the SSA between NCGCL, Karandaaz, and the Government of Pakistan through the Ministry of Finance.

Furthermore, the Ministry of Commerce presented a summary regarding amendments in “SRO 760(I)/2013-Import and Export of Precious Metal Jewellery and Gemstones Order, 2013” and “Import Policy Order 2022-Serial No. 16 of Part II, Appendix-B.”