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The Federal Board of Revenue (FBR) has increased sales tax by 25 percent on cars which manufactured in the country.
The details indicate that in order to meet the desired tax for the current fiscal year, the sales tax was raised from 18% to 25%. Additionally, a notice of a sales tax hike effective March 8 was released by the FBR.
25 percent sales tax will be applied to automobiles made in Pakistan that are 1400CC or less; additional sales tax will be applied to cars that cost $40,000 or more.
The GST rate is still set at 12.5% for cars with engines up to 850cc. The government increased the GST rate to 25% on luxury cars with engines larger than 1400cc in the most recent budget.
It should be mentioned that the goal of this action was to increase money in order to improve the nation.
Local automakers have urged the government to rethink this decision after expressing their displeasure with it. They contend that imports of old cars won’t be impacted by the higher sales tax, which will only have an effect on domestic automakers.