Earlier this month, the federal government made cars up to 850cc cheaper by ending the Federal Excise Duty (FED) and reducing the Sales Tax to 12.5% from 17%. Everyone received the news with great excitement. Still, many wanted to hear the word 1000cc in place of 850cc. Well, guess what? The government has done what we asked for. Finance Minister, Shaukat Tarin, has announced the extension of tax relief for cars up to 1000cc, which means all locally assembled 1000cc cars have gone cheaper.
1000cc Cars
660cc – 800cc Cars
Check out the expected prices of 850cc cars.
When Will Cars Get Cheap for Consumers?
Alright, the government has passed the Fiscal Budget 2021-22 with lower taxes on cars up to 1000cc. But the real question is, when will the prices actually go down? And the answer is from July 1st, 2021. The budget has been debated in the National Assembly and passed by the government. Now, it will be implemented from the start of next month. Henceforth, the new prices will be applicable from July 1st.
Meanwhile, the consumers who will receive cars during this month will have to pay the current price. If the vehicle’s invoice has been issued, the buyer will have to pay the current price. There is no way around it.
Impact on the Local Market
This tax relief will surely make a significant impact on the local car market because the middle class can mostly afford cars up to 1000cc. This is the first time in the history of Pakistan that the government has reduced car prices in a budget. The initiative will increase the buying power of the consumers and increase car sales in the country.
The government, however, has not presented any tax relaxation for imported cars, which means that the government is focusing on the local auto market and wants the people to buy local vehicles.
What is your take on this announcement? On a scale of 1 to 10, how happy are you about this massive tax relief? Share your thoughts in the comments section.
I think it is a good decision, however, the government must also ensure that the customers of the vehicles not getting their cars delivered before first of July get back the amount computed as per new taxes. The reason is that unless Pak Suzuki delivers the vehicle, it cannot book its revenue against that transaction.