ISLAMABAD: Locally manufactured cars having an engine capacity of 850cc or less will be exempted from value-added tax (VAT) while the sales tax on these cars will also be reduced from 17 percent to 12.5 percent.
Finance Minister Shaukat Tarin announced these details while presenting the budget on Friday. The cars below 850cc may see a price decrease of around 5 percent or 6 percent. This will be a good price cut for people who buy cars in this category. A 6% change in the price of Alto’s top variant will amount to nearly Rs100,000.
Additionally, four-wheelers will also be exempted from federal excise duty. So, if you were looking to buy a new ride for yourself, it’s going to be easier on your wallet than you expected.
Suzuki’s spokesperson said that the company is waiting for complete details to share details about the change in car prices. Pak Suzuki’s stock price increased significantly last Friday. It faced an upper-lock after its price increased by 7.5% from Rs310 to Rs333 within a day.
For the fiscal year 2021-22, the Imran Khan-led government aims for inclusive and sustainable growth. “With a target of 4.8% growth rate, the premier wants to turn the direction of the country,” Tarin added.
Referring to the taxes, the finance minister announced that there was no new tax being imposed on the salaried class in the budget. “The rich will be asked to pay taxes in accordance with their wealth,” he said, adding that the salaries class will not be burdened with additional taxes.
He added that in order to support small businesses, the annual turnover tax ceiling has been increased from Rs10 million to Rs100 million, while sales tax is being reduced. Tarin said the government was slashing withholding taxes on mobile phones, adding that it will be reduced to 10% at first and then 8% later.
