ISLAMABAD: Federal Government has decided to reduce customs duty on used and new imported cars in the next budget under regular scheme to introduce competition into local car manufacturing industry to end their monopoly in Pakistan’s market.
Sources said that proposals in Budget 2014-15 suggest five to ten per cent cut in tariffs for the imported cars. The duty would apply to 800-1600 cc cars only, whereas, cars over 1800 cc and luxury cars may have their tariffs of customs duty raised. Used cars will continue to be imported under current regime in terms of their age.
At present 800-1600 cc cars are being imported under 50-75 per cent customs duty tariffs in addition to 17 per cent sales tax, 5 per cent income tax and 1 per cent special excise duty.
Federal government hopes to down locally manufactured cars’ prices by lowering the customs duty tariffs alone.
Furthermore, Budget 2014-15 also contains proposals for lowering customs duty tariff on hybrid cars by 25 per cent. Final decision for that matter shall be taken in federal cabinet’s meeting. FBR has already backed the proposal.
