New Car Prices in Pakistan
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Owning a brand new car in Pakistan just got significantly more expensive as new car prices in Pakistan soar with 25% sales tax hike. The Federal Board of Revenue (FBR) has implemented a substantial 25% sales tax on locally manufactured or assembled vehicles exceeding a price tag of Rs. 4 million (excluding tax). This new regulation, outlined in notification SRO.370(I)/2024, amends the previous SRO.297(I)/2023.

The change doesn’t stop there. The existing 25% sales tax on locally made vehicles with engine capacities of 1400cc or above remains in effect. This double whammy is expected to significantly impact car buyers in Pakistan.

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Tax Hike Aims to Boost Government Revenue

This decision comes after the Economic Coordination Committee’s approval on February 14th, 2024. The primary objective is to generate an additional Rs. 4 billion in tax revenue for the government. The FBR will also be levying the 25% sales tax on locally manufactured double cabin pick-up trucks with four-wheel drive capabilities.

Wider Impact on Consumer Choices

The tax increase goes beyond just engine size; it applies to the overall vehicle price as well. This broader application will likely influence consumer choices, potentially steering them towards lower-priced or used car options.

Considering Buying a New Car in Pakistan?

If you’re planning to purchase a new car in Pakistan, especially a locally manufactured or assembled model exceeding Rs. 4 million, be prepared for a significant price increase due to the new 25% sales tax. It’s advisable to research your options thoroughly, considering both new and used car markets, before making a final decision.

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