New Withholding Taxes Impact Car Prices in 2024-25 Budget

Jawad

13 Jun 2024

390

New Withholding Taxes Impact Car Prices in 2024-25 Budget

The recent budget for the fiscal year 2024-25 in Pakistan has introduced new withholding taxes, significantly impacting car prices across various segments. This financial measure aims to increase government revenue, but it has also led to notable changes in the automotive market, affecting both manufacturers and consumers.

Impact on Car Prices

Car prices in Pakistan have surged as a direct consequence of the new withholding taxes. The increase varies across different car models and manufacturers, reflecting the differential tax rates applied based on vehicle type and engine capacity. For instance, small to mid-sized cars, which were previously more affordable, have seen a significant hike in prices, putting additional financial pressure on average consumers. High-end and luxury vehicles have also experienced price increments, making them less accessible to a broader market segment.

New Withholding Tax on 660-850cc Cars

The new WHT rates for cars with engine capacities between 660cc and 850cc show a notable increase. For instance, the Suzuki Alto VX, previously valued at PKR 2,331,000, now attracts a proposed tax of PKR 11,655, a rise of PKR 1,655. The Suzuki Bolan and Suzuki Ravi models have slight reductions in their WHT, while other Alto variants, such as the VXR and VXL AGS, see increases ranging from PKR 3,535 to PKR 5,225.

New Withholding Tax on 851-1000cc Cars

For cars in the 851cc to 1000cc range, the proposed WHT changes are more substantial. The Suzuki Wagon R VXR, for example, now has a proposed tax of PKR 32,140, which is an increase of PKR 12,140. Similarly, the Suzuki Cultus VXR's new tax is PKR 38,580, reflecting an increase of PKR 18,580. The KIA Picanto and Changan Karvaan also show increases, with the Picanto 1.0 MT now having a tax of PKR 36,000.

New Withholding Tax on 1001-1300cc Cars

In the 1001cc to 1300cc category, the Suzuki Swift GL Manual now has a proposed WHT of PKR 65,040, up by PKR 40,040. The Honda City 1.2L M/T's new tax is PKR 69,735, an increase of PKR 44,735. Peugeot 2008 models also see significant hikes, with the Active variant's tax now at PKR 99,000.

New Withholding Tax on 1301-1600cc Cars

Cars in the 1301cc to 1600cc range, like the Toyota Yaris GLI MT 1.3, have new WHTs of PKR 89,580, up by PKR 39,580. The Honda HR-V VTi now has a proposed tax of PKR 152,980, marking an increase of PKR 102,980. The Honda Civic models, such as the Civic Oriel, now have a tax of PKR 173,180, up by PKR 123,180.

New Withholding Tax on 1601cc-1800cc Cars

The new WHT for 1601cc to 1800cc cars includes significant increases. The Toyota Corolla Altis Grande X CVT-i 1.8 now attracts a tax of PKR 225,270, up by PKR 75,270. The Hyundai Elantra GL has a new tax of PKR 191,970, an increase of PKR 41,970.

New Withholding Tax on 1801cc-2000cc Cars

For 1801cc to 2000cc cars, the changes are even more pronounced. The MG HS 2.0T AWD now has a proposed WHT of PKR 464,950, an increase of PKR 264,950. The Kia Sportage Alpha's tax is now PKR 365,000, up by PKR 165,000. Hyundai Tucson models also see increases, with the AWD A/T Ultimate variant now having a tax of PKR 432,950.

In summary, the 2024-25 budget's new WHT scheme based on ex-factory prices has led to varied increases in car prices across all categories, significantly impacting the automotive market and consumer purchasing power.