Regulatory Duties on Imported Cars Raised to 100%
In a bid to control import bills and avert the fiscal slippages, government has started taken the necessary steps. In a recent action, the Federal Board of Revenue (FBR) has increased the regulatory duties (RD) and additional custom duties (ACD) on the import of non-essential and luxury items including vehicles (CBU).
Increase in Regulatory Duty (RD)
As per reports, regulatory duties on the cars larger than 1000cc are increased to 100 percent, had previously been 15 percent. Meaning, duties imposed on CBU cars observed a hike of 85 percent. Resultantly, car prices would mark a new high – local market may witness a new price hike series.
The Federal Board of Revenue has issued SRO1571(I)/2022 under which the increased rate of regulatory duty would be applicable from August 22, 2022 to February 2023.
Additional Custom Duties
The FBR has also imposed 35 percent additional custom duty on the vehicles falling under the following PCT codes:
- 2323 — Sport utility vehicles -SUVs 4×4
- 2329 — Sedans and Hatchbacks)
- 2490 — diesel-powered vehicles
- 3223 — CKD or SKD kits for SUVs
- 3225 — all-terrain vehicles (4×4)
- 3229 — Commercial vehicles
- 3390 — Other vehicles with internal combustion engines or electric motor
- 9000 — Vehicle included the SRO.1517(I)/2022.
Earlier, in a press conference, finance minister Miftah Ismail announced to end the import ban on non-essential and luxury items including imported cars.
Govt Ends Car Import Ban BUT…
The finance minister said the government decided to lift the ban in the face of the international requirement, but it should be noted that three times higher regulatory duty will be imposed on non-essential imported items.
“…we will impose such heavy duties that these items cannot be imported [easily] or at least in their finished form. I don’t have enough dollars, so I will prioritize cotton, edible oil, and wheat. I do not prioritize Iphones or cars.”
Ismail said, the imposed regulatory duties would be between 400-600 percent because we didn’t have enough foreign exchange to spend on luxury car models.
“Even then, if a person wants to import a car that is originally worth Rs. 60 million [but after the regulatory duties] it will cost them Rs300-400 million, they can import it.” He added.
Heavy regulatory duty imposed on CBU units would in turn bring a new fuss in the local auto market, price of imported cars will again witness a massive hike.