Dissecting the new regulatory import tax on automobiles in Pakistan

• Ali Laghari


• 18 Oct 2017

It turns out that government is seriously willing to stable the value of rupee as for quite some time now the value of rupee has been uncertain, which is affecting the overall economy of the country. And that is why the government has changed regulatory import taxes for some of the imported items to give more leverage to local producers and stop the devaluation of the rupee. In a new SRO1035(I)/2017 issued by Federal Board of Revenue, it has listed the items which Pakistan imports such as imported cars and also listed regulatory customs taxes of the items. However, after the list was put on malicious rumors regarding the revised customs tax on imported vehicles started to circulate and created a fuss in the car market. So through this article, PakWheels.com is filtering out the fake rumors regarding the new regulatory customs tax on imported vehicles.

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Rumours were circulating that government has increased the regulatory customs tax on all imported cars, used or new. However, this is not the case and if one explicitly see the SRO, it mentions that 20% regulatory customs duty has increased only for new (zero-meter) imported vehicles which are above 1800cc, previously the regulatory customs duty was 60% and now with the addition of 20% more it now stands at 80%.  Imported vehicles which are below 1800cc, whether used or new, have unchanged custom duty. Moreover, used and old imported vehicles which are above 1800cc also have unchanged custom tax, which is 60 percent.

Below is a small list of vehicles and their custom taxes according to the newly issued SRO.

• Old and Used Sport-Utility Vehicles (SUVs) 1801cc-3000cc: 60% (unchanged)
• Used Cars and Jeeps 1801cc-3000cc: 60% (unchanged)
• New Cars and Jeeps 1801cc-3000cc: 80% up from 60% (20 % increase)

As one can see that the customs duty has been increased only on new vehicles which are above 1800cc. After the malicious rumor, that government has imposed a new regulatory customs tax on all imported vehicles new or old, many auto-illiterates not going through the SRO themselves harshly criticized the government. So PakWheels.com felt that it is its duty to paint the true picture and also to tell those people who spread false rumors to check the facts first before making comments on any issue.