Expected Price Hike For Imported Cars After New Fixed Tax



Expected Price Hike For Imported Cars After New Fixed Tax
The Finance Bill 2023 has gained significant attention, especially within the auto industry, as Finance Minister Ishaq Dar announced a new tax for cars over 2001cc. The bill aims to increase the overall tax net of the country in line with the directives of the International Monetary Fund (IMF). Let's explore the key provisions of this new taxation scheme:
Tax Rates based on Engine Capacity
- 6% tax on vehicles with engine capacities from 2001cc to 2500cc.
- 8% tax on vehicles with engine capacities from 2501cc to 3000cc.
- 10% tax on vehicles with engine capacities exceeding 3000cc.
Implementation of the Tax
The tax will be implemented through the following practices:
- Import Value Assessment: The Customs department will evaluate the import value of cars with engine capacities exceeding 2001cc. This import value will be used to determine the applicable Customs Duty, Federal Excise Duty (FED), and Sales tax.
- Consideration of Invoice Value: For both Completely Built-up (CBU) and locally assembled cars with engine capacities above 2001cc, the invoice value, which includes all duties and taxes, will be taken into consideration.
- Value-based Tax for High-Value Vehicles: In cases where engine capacity is not relevant, and the value of vehicles is Rs. 5 million or higher, a tax rate of 3% will be imposed on the import value (including the revised Customs Duty, FED, and Sales tax for imported vehicles) or the invoice value (for locally assembled vehicles).
Tax Levy on Sale and Registration
- Sale of Locally Manufactured Vehicles: If a locally manufactured vehicle is sold by the original purchaser before registration, the motor vehicle registering authority will levy taxes at the specified rates during the registration process.
- Advance Taxes by Manufacturers: Manufacturers of motor vehicles are required to collect advance taxes from buyers at the specified rate during the sale of motor cars or jeeps.
These measures introduced in the Finance Bill 2023 aim to enhance revenue collection and align with the broader economic goals of the country.
Expected Price of Imported Cars
In the table below, we present the anticipated price increase for imported cars after the implementation of the New Fixed Tax.
List of Cars | Variant | Engine capacity | Ex. Factory Price | New Fixed Tax | % |
2199 cc | 8,909,000 | 534,540 | 6% | ||
2487 cc | 53,859,000 | 3,231,540 | |||
2755 cc | 59,109,000 | 4,728,720 | 8% | ||
Toyota Prado | 2755 cc | 67,249,000 | 5,379,920 | ||
3470 cc | 16,750,000 | 1,675,000 | 10% | ||
3445 cc | 156,829,000 | 15,682,900 | |||
4009 cc | 26,789,000 | 2,678,900 |
Toyota Land Cruiser
land cruiser
Toyota Land Cruiser 2023
Toyota Camry
Camry
Toyota Camry 2023
Finance Bill 2023
Fixed Tax 2023
New Fixed Tax
New Car Prices
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