The imported and locally assembled cars of up to 800cc engine capacity are going to be cheaper as the federal government is considering cut in taxes and duties in the coming budget 2021-22.
Sources said a proposal is under consideration to cut import duties on new cars by 63 percent and 7 percent on locally produced to “make them affordable to the middle class.”
It is proposed that 50 percent regulatory duty be abolished, either eliminate 7 percent additional customs duty or reduce the customs duty by the same percentage and abolish 2.5 percent federal excise duty on new imported cars, the sources added.
At present taxes and duties on new imported cars of up to 800cc capacity are almost 132 percent of the invoice price. If government approves the cut, the duties and taxes will be reduced by almost 63 percent, the sources added.
In terms of Pak rupee, the price of an imported car of up to 800cc capacity may reduce by Rs300,000 to Rs400,000.
The sources said high taxes on imported cars aimed at protection to local assemblers who “have long been fleecing the consumers.”