In a National Assembly session today, Federal Minister of Finance Shaukat Tarin revealed that the federal budget for FY2021-22 will exempt up to 1,000cc vehicles from taxes.
Previously, the Finance Bill, which was introduced in the National Assembly on June 12th, proposed tax measures for vehicles with engines up to 850cc under the Customs Revenue Measures, including the exemption of Additional Customs Duty (ACD) and Regulatory Duties (RD), as well as a reduction of Customs Duty (CD) from 30% to 15%.It was proposed that CD be reduced from 25% to 10% for Completely Built Units (CBU), and from 12.5 percent to 5% for local manufacture.
Due to the limited options available in the sub-850cc category, there was a strong demand to include up to 1000cc cars in the tax exemptions.With the widening of tax reliefs to automobiles with engines up to 1000cc, manufacturers such as Suzuki Wagon R, Cultus, Kia Picanto, United Alpha, Changan Karvaan, and others are likely to gain, resulting in significant price reductions that benefit end consumers.
Additionally, the registration charge and motor vehicle tax on electric cars (Evs) have been eliminated; however, this exemption only applies to 2- and 3-wheeler Evs as well as heavy commercial electric vehicles. Incentives for four-wheel electric vehicles (passenger cars) will be announced in the future auto policy, which will also include electric automobiles.
