Government Wants to Reduce Car Taxes to Mitigate Price Hikes: Report
The ongoing price hikes have become a massive concern for car buyers across Pakistan. Economy car buyers, in particular, have suffered greatly.
According to media reports, MoIP has suggested the following tax reductions on new cars:
- 2.5 percent reduction in Federal Excise Duty (FED)
- 2 percent reduction in Additional Customs Duty (ACD)
MoIP noted that car companies have already increased prices several times prior to the budget announcement, citing depreciation of the local currency, rising raw material costs, and freight costs.
Last week, Engineering Development Board (EDB) issued a stern warning to local car assemblers against price hikes. According to an official document, the board asked them to provide their cost structures and justification for the recent hikes.
It summoned a meeting regarding the matter on May 10, 2022, in which, it requested the presence of the respective CEOs of nearly all local automotive groups. The reports of MoIP’s proposal to reduce taxes for the auto sector have come immediately after EDB’s meeting with senior representatives of the auto industry.