Budget 2024-25 – Govt Proposes New Withholding Tax on Local Cars

• Ahsan Tahir


• 12 Jun 2024

The government just released the budget for 2024-25. According to the new budget summary, the government has proposed a hike in the WHT (Withholding Tax) on new cars.

Furthermore, a change in the calculation of new car registration charges has been introduced in the budget. In the past, registration charges were based on the engine sizes of vehicles. However, the latest budget suggests that registration charges will now be calculated based on the invoice price of the car and not as per the engine capacity (applicable on ars up to 2,000cc).

Here’s the revised tax with examples:

For example, if you had previously bought a Suzuki WagonR for 3.8 million PKR, you would have paid 20,000 PKR on registration charges. Now, with new charges, you’ll pay 38,000 PKR in registration charges.

The government has also removed the 50% concession from HEV cars. Now, HEV owners will have to pay the full 100% custom duty on their HEV vehicles, and no exemption will be provided.

For instance, consider a scenario where the regular duty on a HEV 1,500cc car amounts to 1 million PKR, which represents 30% of the car’s overall value. Under the old policy, the government only charged 25% of the car’s value.

Now, this exemption is removed, and the customer will have to pay full customs duty.