Under the forthcoming Auto Development Policy (ADP) for 2021-2026, the government is exploring several ideas to reduce Additional Customs Duty (ACD) and Regulatory Duty (RD) on various brands of cars and other vehicles.
With the reduction in taxes, different brands of cars are likely to be cheaper, with costs ranging from Rs100,000 to Rs400,000 depending on engine capacity. The next ADP 2021-2026 aims to attract new entrants and make the auto sector competitive so that Pakistan can begin exporting motorbikes, followed by cars and tractors.
In conjunction with the Engineering Development Board, the Ministry of Industries and Production considers several tax reduction possibilities to lower car prices. Officials noted, however, that in the next months, the number of different automobile brands will reach 55. There would be enough competition to ensure that several plans are available on the domestic market.
Under the new Auto Development Policy 2021-26, the government is examining various suggestions to reduce Additional Custom Duty (ACD) on Completely Built Units (CBU), Completely Knocked Down (CKD) kits on imports and local manufacture, as well as Regulatory Duty (RD) on CBU and Hybrid CBU.
Prices of various automobile manufacturers will be decreased due to the proposed reduction in ACD and RD, ranging from Rs100,000 to Rs400,000. However, this is contingent on the government’s capacity to ensure that the customers pass the gains.
The current pricing of the Alto 660cc is Rs11,98,000. With a reduction in Federal Excise Duty (FED) of Rs29,950, Sales Tax of Rs53,910, and Additional Customs Duty of Rs20,965, the total price reduction is estimated to be Rs104,458, resulting in a new price of Rs1,093,542.
Likewise, the Alto VXR 660 is Rs1,633,000, with a FED reduction of Rs40,825, Sales Tax of Rs73,485 and ACD Rs28,578, for a total reduction of Rs142,388, resulting in a new price of Rs 1,490,613. The current price for a Cultus AGS with a 1000cc capacity is Rs2,130,000.
The current price of the City 1.3 Automatic is Rs2,639,000. With a FED reduction of Rs65,975, a 0% Sales Tax reduction, and an ACD reduction of Rs46,183, the total reduction is estimated to be around Rs112,158. City 1.3 AT’s revised price is likely to be around Rs2,526,843.
The Grande 1.8 is now Rs3,999,000, but with planned reductions in FED and ACD, the total decrease is expected to be roughly Rs169,958, bringing the revised price to Rs3,829,043. The current pricing of the Sportage AWT 2 is Rs5,399,000. With lower FED and ACD, the total reduction is estimated to be roughly Rs229,458, resulting in a new price of Rs 5,264,026.
The new pricing for the Toyota Fortuner is likely to be roughly Rs8,903,793 from the current price of Rs9,299,000, with a savings of around Rs395,208 in FED and ACD.
