Mini-Budget – Confusion Over FED Continues!

1 2,397

Last week, the federal government finally passed the Finance (Supplementary) Bill 2021, also known as mini-budget. Under the new bill, the Federal Excise Duty (FED) and Sales Tax were revised on locally assembled and imported cars.

However, the document of the bill is still not available, causing confusion among the car companies, car dealers, and buyers. And the government is responsible for it. It is pertinent to mention that the mini-budget is the second change in taxes on cars after the auto policy. Earlier, the government re-imposed Regulatory Duty (RD) on imported/CBU cars. Now the mini-budget has arrived, causing another storm of uncertainty in the local market.

The Biggest Confusion

The biggest confusion is over FED on cars up to 1000cc. Let us explain. Last month, the government presented this mini-budget in the parliament and proposed new taxes on cars. At that time, the government excluded cars from 0 to1000cc from the proposed tariffs. Apparently, this step was in line with the government’s mission to relieve the middle-class section of society. It has repeatedly said that the new auto policy is to make small cars affordable for the masses. So, it was obvious in the proposed mini-budget that there would be no change in taxes of vehicles up to 1000cc.

However, when National Assembly passed the bill, everyone was surprised. As per reports and a bill document, the cars from 0-1300cc got 2.5% FED. After reading the paper and analyzing news reports, we concluded that the government has imposed duty on vehicles up to 1300cc.

Remember that the government didn’t even propose the duty earlier, but now it has been applied, apparently. And no one is sure how that has happened.  Furthermore, President Alvi has signed the bill but the copy of the bill is still not available. Hence, the confusion continues because neither car companies, nor the dealers are clear on it.

So, our message to the government once again is, decide what you want to do? Set clear goals and then impose the taxes and duties once and for all because this continued confusion harms everyone.

 

Google App Store App Store

Leave A Reply

Your email address will not be published.