Federal Excise duty and Withholding Taxes on certain Personal Cars categories have been revised Downwards in the Federal Budget 202-2022 which would likely reduce end prices of vehicles. Below is the list of New car prices after budget 2021-2022.
The year 2020-21 has so far produced a mixed bag for the automotive industry. Car Sales picked up during 2nd Half of the Fiscal Year (Jan’2021-June’2021) while it remained lack luster in the First Half (July’2020 – December’2020) primarily due to COVID19 induced slowdown.
Reduction in the Goods & Services Tax (GST) for vehicles of up to 1000cc Engines tops the budget recommendations for the automobile industry. Last year, the Auto industry recorded its worst-ever sales decline in decades as Higher Interest Rates and Economic recession took a toll on the car sales in the country.
Auto Industry has welcomed the reduction in GST for small engine size cars. Such reduction in Car taxes will negate the recurring vehicle price hike and make them more affordable. If there is a reduction in GST, it will also boost the government’s tax revenue as a higher retail demand will generate an additional tax income.
Furthermore, Government has also reduced Withholding taxes on Cars. The reduction is across all engine sizes by a uniform 2.5%. In small sized engine category, where WHT was already 2.5%, WHT has altogether been removed. While in the higher engine category, where WHT was 7.5%, it is now reduced to 5%.
As per the new car prices, customers will now have tax savings ranging from Rs.62,000 up to Rs. 195,000 depending on the car engine size.
Below is the revised car price list for the year 2021-2022 in Pakistan.