New Regulatory Duties on Imported Used Cars

Jawad

04 Jul 2024

346

New Regulatory Duties on Imported Used Cars

In the recent fiscal budget for 2024-25, the government made amendments to tax charts, impacting Pakistan's auto industry. With the Finance Bill 2024-25 now approved, these new duties and taxes are officially in effect. One significant change is the new 15% regulatory duty (RD) on imported used vehicles with engine capacities ranging from 1300cc to 1800cc, and a steep 70-90% RD on vehicles above 1800cc. Cars under 1300cc face no regulatory duty, meaning popular models like Toyota Aqua, Honda Vezel, and CHR will see a price increase.

Engine Capacity	Regulatory Duty on Hybrid Cars (%)	Regulatory Duty on Petrol Cars (%)
0-1300cc	-	-
1300-1800cc	16%	16%
Above 1800cc	15%	70-90%

Exemptions for Smaller Cars

Smaller-engine cars (below 1300cc) such as the Daihatsu Mira, Nissan Dayz, and Toyota Vitz are exempt from the new Regulatory Duty and will continue with their current fixed taxes. While this benefits smaller cars, it could hurt local manufacturers like Pak Suzuki, which produces vehicles like the Alto (660cc), WagonR (1000cc), Cultus (1000cc), and Swift (1200cc). This exemption aims to keep these smaller vehicles affordable and competitive.

Price Increase for Imported HEVs

Used Hybrid Electric Vehicles (HEVs) exceeding 1300cc will see the most significant price hikes. Models like the Honda Vezel, Toyota Yaris Cross, Honda CHR HEV, and Toyota Corolla Cross are expected to become Rs. 2.5 million to Rs. 3 million more expensive, pushing their market value to between Rs. 7.5 million and Rs. 9.5 million. This substantial increase could affect the affordability and demand for these imported HEVs.

No Custom Duty Exemptions

There are no custom duty exemptions on old and new imported (CBU) hybrid cars under SRO 499. This move aims to protect locally assembled HEVs by making imported hybrids more expensive, encouraging consumers to buy locally produced vehicles. This strategy could help boost the local auto industry by increasing demand for domestically manufactured hybrid cars.

Regulatory Duties Imported Cars Used Vehicles Fiscal Budget Tax Amendments Car Imports Whitholding Tax Regulatory Duties on Used cars

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