Here Are The New Tax Rates for All Imported Cars in Pakistan

The federal cabinet is finally ready to approve new tax rates on imported vehicles in a session scheduled for later today.

According to the latest updates, an amendment has been made to the Regulatory Duty (RD) against imported electric vehicles (EVs) with battery packs larger than 50 kWh, as the proposed figure was considered too high.

The following are the new RD rates approved for CBU vehicles:

• RD on Internal Combustion Engine (ICE) vehicles with engine displacements above 850cc has been increased from 15 percent to 50 percent.
• RD on Hybrid Electric Vehicles (HEVs) with engine displacements between 1,500cc to 1,800cc also increased from 15 percent to 50 percent.
• RD on EVs with battery-packs larger than 50 kWh has also been increased to 27 percent.
• The imposition of Federal Excise Duties (FEDs) on locally manufactured vehicles with engine displacement above 850cc has been referred back to the Federal Board of Revenue (FBR) for consideration.

According to government officials, the new tariff rates on CBU vehicles are being imposed to curb the rising import bill and to encourage the car industry to resort to local manufacturing.

Moreover, the Ministry of Industries and Production has proposed an increase in the Federal Excise Duties (FEDs) on the imports of locally assembled vehicles to pin down the exponential growth of the auto sector imports.

Although the proposed rates of levies for locally manufactured vehicles are relatively small, they are likely to have a significant impact on the prices of cars, if approved. Also, the decision in this regard may be issued in the Cabinet session today.