Budget 2019-20: Revision in Federal Excise Duty (FED) Rates to Effect Car Prices

Pakistan Tehreek-i-Insaf’s government has tabled its maiden federal budget in the National Assembly today and as expected its a mixed bag.

While the budget remains under discussion and scrutiny of financial analysts and its effects would be felt for quite some time, the following are some of the salient features of the federal budget 2019-20 for the local automotive market:

  1. Cars up to 1000 cc engine displacement to have 2.5% FED
  2. Cars up to 2000 cc engine displacement to have 5% FED
  3. Cars of engines bigger than 2000 cc to have 7.5% FED
  4. The extra tax of 2%, in addition to standard sales tax on tyre/tubes and auto parts, is proposed to be withdrawn by the government.


It is interesting to note that here that the federal government had earlier imposed 10% FED on locally manufactured cars of 1700 cc engine displacement and above. The government through Finance Supplementary (Second Amendment) Bill 2019 had imposed a 10% federal excise duty (FED) on locally manufactured cars of 1700cc and above engine displacement with an aim to tax the rich.


Now the tax regime has been revised with cars up to 1000 cc engine displacement to now have 2.5% FED, which was absent before. Similarly, cars of 1001 cc to 2000 cc engine displacement to now have 5% FED. Honda Civic 1.8 and Toyota Grande (both above 1700 cc engine displacement) were worst affected with the imposition of 10% FED, may now see a revision in their prices as a result of 5% FED. Buyers of cars with engine displacement 2001 cc and above will now have to pay 7.5% FED.

In short, the government has expanded the scope of FED.

As this is a developing story, so stay tuned to PakWheels.com for more in-depth blogs on this topic.

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  • Sheen

    What about half cuts and autoparts is that side is effected by this budget?? Whether its ok to import auto parts or half cuts in Pakistan Anymore?? Please respond to this question