Sunday, 14 April 2024
Auto Sector wins Tax Relief in Budget 2021-2022

Auto Sector wins Tax Relief in Budget 2021-2022

The financial year 2021-2022 budget represented by the government on Friday, where several upcoming policy changes have been brought. Rumors’ are being made about the changes that are expected in the new auto policy after the budget. As it has often been expected that the local prices of the vehicles may finally reach stability.

Federal Excise Duty on Vehicles

It revealed that the government in recent budget ended the Federal Excise Duty (FED) on locally assembled vehicles with an engine capacity of 850cc or less. The said Federal Excise Duty rate was 2.5% prior to the development.

Reduction of Sales Tax Rate

In the budget speech, Federal Finance Minister Shaukat Tareen further said that sales tax on the said segment of cars also bring down from 17% to 12%, resulting in a 4.5% of reduction in tax rates.

Reduction in Price of Vehicles

Companies such as the Pak Suzuki Motor Company (PSMC), Regal Motors, and United Motors, the only companies that currently assemble and sell vehicles with an engine capacity of 850cc or less. Which implies that their prices should now be reduced by approximately Rs. 150,000.

See also  Updated tax provisions for property rental income in budget 2021-22

Future Trends

Carmakers are expecting better prices, while the government is working hard to strengthen the local auto industry. The above development also indicates the arrival of several new small cars in the Pakistani market.

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