A New Fixed Tax for Cars has been announced by the Federal Government and passed the Finance Bill 2023 yesterday. The automobile industry will see huge hikes in the prices of vehicles of all sizes and engine capacity. However, the majority of the new tax will be applied to vehicles that are 2000cc and above.
The new tech imposed will make sure that there is an evil distribution of taxes on the poor as well as the rich. While some may think that the new tax is too much, it is necessary for the betterment of the automobile industry in Pakistan, which has suffered a lot in the previous year or so.
Here is everything you need to know about the new fixed tax on cars, both imported and local vehicles.
Details of the New Fixed Tax on Cars
- Vehicles with engine capacities from 2001cc to 2500cc will be taxed at 6% of their value.
- Vehicles with engine capacities from 2501cc to 3000cc will be taxed at 8% of their value.
- Vehicles with engine capacities exceeding 3000cc will be taxed at 10% of their value.
Expected Tax Increase on Locally Assembled Cars
|List of Cars||Variant||Engine Capacity CC||Ex. Factory Price|
|Kia Sorento||2.4 AWD||2359||11,300,000|
|Kia Sorento||2.4 FWD||2359||10,400,000|
|Hyundai Sonata||12:00 pm||2497||11,280,000|
|Hyundai Porter (H-100)||High Deck||2607||3,829,000|
|Toyota Hilux Revo||Revo V Automatic 2.8||2755||14,389,000|
|Toyota Hilux||Revo GR-S||2755||16,149,000|
|Toyota Hilux Rocco||Rocco||2755||15,179,000|
|Toyota Fortuner||2.8 Sigma 4||2755||19,079,000|
|Isuzu D-Max||V-Cross Automatic 3.0||2999||11,800,000|
|Kia Sorento||12:00 pm||3479||11,390,000|
Expected New Fixed Tax on Important Cars
The government of Pakistan has announced a new fixed tax on cars with engine capacities exceeding 2001cc. These taxes will be applied to both imported and locally assembled cars.
For imported cars, the customs department will evaluate the import value of the vehicle. This import value will be used to determine the applicable customs duty, federal excise duty (FED), and sales tax. The import value of a car will be determined based on the following factors:
- The invoice value of the car
- The cost of freight and insurance
- The cost of import duties and taxes
For both imported and locally assembled cars, a sales tax of 3% will be applied to the invoice value of the car. This sales tax will be levied by the motor vehicle registering authority at the time of registration.
There are a few exemptions from these taxes. For example, cars with engine capacities below 2001cc are exempt from import taxes. Additionally, cars that are used for government or military purposes are also exempt from the sales tax.
Manufacturers of motor vehicles are required to collect advance taxes from buyers at the specified rate during the sale of motor cars or jeeps. The advance tax will be used to offset the sales tax that will be levied at the time of registration.
|List of Cars||Variant||Engine capacity cc||Ex. Factory Price|
|Hyundai Staria||2.2D A/T||2199||8,909,000|
|Toyota Camry||High grade||2487||53,859,000|
|Toyota Prado||TX 2.8 D MT||2755||59,109,000|
|Toyota Prado||TX 2.8 D AT||2755||67,249,000|
|Kia Grand Carnival||Executive||3470||16,750,000|
|Toyota Land Cruiser||ZX||3445||156,829,000|
|Toyota Coaster||29 Seater F/L||4009||26,789,000|