Budget 2021-22 ended many taxes like withholding tax on bank transactions which was a big hurdle for the business community who wanted to remain without filer status and keep their business transactions out of the bank mostly in cash.
Taxes on locally manufactured cars have also been reduced. Govt is bringing a new auto policy and the same has been implemented in budget 2021-22. Sales tax on Locally manufactured cars which was earlier 17% has been reduced to 12.5%.
In Post budget meeting where Shaukat Tareen Finance Minister. Minister for Trade and Industry Khusru Bakhtiar and Razzaq Daud were present.
It was discussed in the post-budget meeting that very few card makers in Pakistan are manufacturing cars up to 850 CC for which tax relaxation in budget 2021-22 has been granted. The cars include United Bravo of United Motors, Prince Pearl, and Suzuki Alto.
The price reduced due to relaxation of tax is Rs75000 to Rs.100,000.
In Post budget meeting it has been discussed to further reduce the sales tax to just 5% and up to 1000 CC cars so that more segments of the society could benefit from this tax relation.
People who have more options to choose from cars like Suzuki Cultus, WagonR, and Kia Picanto.
This will help enhance the overall capacity of the companies for production purposes and will increase employment in the country.
Federal Excity Duty is already reduced on cars up to 850 CC cars and this has been discussed to further extend it to 1000 CC Cars which will help to reduce prices of cars up to 1000 CC cars and will increase people buying powers.
For completely built-up units in imports, the Customs duty was discussed to reduce from 25% to 10%. If it’s done imported cars will create direct competition with local manufacturing cars.
On Electric vehicles Govt in budget reduced the sale tax from 16% to just 1% to promote electric vehicles in Pakistan.
Govt is trying to engage the automobile companies to build infrastructure in the country to promote electric vehicles in Pakistan. building of infrastructure means building power stations for electric vehicles and without that electric cars can not be promoted.
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