In June 2024, the government proposed a new automotive tax policy on brand-new local cars. Under the revised policy, WHT tax on cars will now be calculated based on their value, i.e., the invoice price.
Prior to this policy, WHT was calculated based on engine size, but the new policy proposes to calculate it based on a percentage of the car’s value.
Note that the percentage is different for Filers and Non-filers. Non-filers will pay a higher percentage of WHT than Filers.
For example, Filers will pay 1% of the car’s value for a 1000cc car, while Non-filers will pay 3% of the car’s value.
Previously, we reported on this policy change but only included the tax percentage for filers. Here is the updated table, now including the tax rates for non-filers as well:
The new WHT policy has come into effect since 1st July 2024.
The government has also increased the WHT percentage for cars above 2,000cc.
Critics argue that the Pakistani automotive market is already struggling due to overpriced cars, and new tax policies will likely exacerbate the situation. However, some car experts say that WHT on a car’s value is more sensible than a car’s engine size.
This policy will increase the tax amount on both lower-budget and high-budget cars, including Alto, WagonR, and Cultus. Suppose you buy a WagonR VXL. Under the old policy, you would have paid PKR 20,000 for a filer and PKR 60,000 for a non-filer in the WHT tax, but under the new policy, you’ll pay 1% of WagonR’s invoice price for the filer and 3% if you’re a non-filer, which equates to 31,000 PKR or 102,000 for non-filers.
Commercial vehicles like Suzuki Ravi will benefit from this policy, i.e., they’ll pay PKR 9,000 instead of PKR 10,000 for filers or PKR 27,000 instead of PKR 30,000 for non-filers.
Let us know in the comments what you think about this revised policy?
Finally something good to hear. Tax should be according to price, as it shows the income group and purchasing power of the individual.
To be brief, nothing from any government in this country, any good can be expected. A new budget does not and should not necessarily mean an increase in the prices. This does not happen anywhere. Common man’s survival is always kept in mind. Here the luxuries of mafias are given priority. This aim can only be achieved by squeezing the blood of the ordinary Pakistani including the low-paid fixed income group.