Locally assembled or manufactured cars just got way more expensive after the latest tax hike by the regulator.
The Federal Board of Revenue (FBR) has imposed a 25 percent sales tax on locally manufactured or assembled vehicles if the invoice price exceeds Rs. 4 million.
The FBR has amended SRO.297(I)/2023 through a notification SRO.370(I)/2024 issued on Friday. According to the notification, a 25 percent sales tax would continue to be applicable on locally manufactured or assembled vehicles having engine capacity of 1400cc and above.
This comes after the Economic Coordination Committee of the federal cabinet on February 14 approved the higher sales tax rate on locally manufactured or assembled vehicles to generate an additional Rs. 4 billion in tax revenue.
The FBR will charge 25 percent sales tax on locally manufactured or assembled double cabin (4×4) pick-up vehicles.
The FBR will charge 25 percent sales tax on locally manufactured or assembled vehicles if the invoice price (excluding sales tax) exceeds Rs. 4 million.
Will the tax apply to engine capacity of less than 1400cc but price is above 4 million?
Yes, That’s the whole purpose of this tax.
Yes, This is Exactly why this SRO is being revised.