Here Are The Details Of Revised Regulatory Duty On Imported Used Cars

July 9, 2024Zayn0

The current administration altered tax charts in the most recent fiscal budget 2024–25, which is currently having an impact on Pakistan’s already precarious auto sector. Now that the Finance Bill 2024–25 has been adopted, the additional taxes and levies are formally in effect. Here are the details of revised regulatory duty on imported used cars

15% regulatory duty (RD)

A new 15% regulatory duty (RD) has been imposed by the government on imported old cars with engines between 1300 and 1800cc. RD is 70–90% above 1800cc. In the meanwhile, vehicles under 1300cc are exempt from regulatory duties. This essentially indicates that prices for well-known vehicles like the Toyota Aqua, Honda Vezel, and CHR will rise.

Discount on Smaller Automobiles 

Smaller-engine vehicles (those with engines smaller than 1300cc), such as the Daihatsu Mira, Nissan Dayz, and Toyota Vitz, are not subject to this RD and will keep paying their present fixed taxes. Smaller cars may profit from this exemption, but local automakers like Pak Suzuki, which makes the Alto (660cc), WagonR (1000cc), Cultus (1000cc), and Swift (1200cc), may suffer.

Import HEVs Will See Sharp Price Increases 

Used hybrid electric vehicles (HEVs) with displacements of more than 1300cc are expected to be most affected. These consist of the Toyota Yaris Cross, Honda CHR HEV, Honda Vezel, and Toyota Corolla Cross vehicles.

Their current market worth is projected to increase from Rs. 7.5 million to Rs. 9.5 million as a result of a notable price increase of Rs. 2.5 million to Rs. 3 million.

New Withholding Tax 

Additionally, the government changed the withholding tax, which is now assessed on the ex-factory price instead of the engine capacity as it was previously. The local automakers were compelled by the action to raise the price of their vehicles. Regal Automobiles and MG Pakistan increased their prices a day ago, citing new tax implications. The market will watch the continuation of this price raise series in the upcoming days.

Since the episode doesn’t end here, SRO 499 does not apply to import hybrid cars, both new and old (CBU) that are exempt from customs duties. The action was taken to protect HEVs that were assembled domestically.

Zayn

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