KARACHI: The Supreme Court of Pakistan has directed the Ministry of Finance and the Federal Board of Revenue (FBR) to reduce taxes imposed on locally-assembled vehicles from 33% to 25%.
An official of a major car manufacturing company has said that sales tax, customs duty and income tax accumulate to an estimated 33% of the total price of the vehicle.
The three-member bench was hearing a petition filed by Awais Ahmed, a social media campaigner against car manufacturers. Ahmed, in his petition, had said that local car manufacturers were charging exorbitant prices, in part because of high tax rates, while delivering low-quality vehicles to customers.
“The court is convinced to the matter that the populace is being charged with unfair taxation and monetary charges, which are in contravention to the existing financial rules,” the court order read.
“But as contended by the learned counsel for the respondent (FBR) it is expedient to charge such values to elevate the financial situation of the country,” it added.
However, the court said that it was not fully convinced by the narrative that tax rates were high due to Pakistan’s poor economic position, saying that the country instead needs strong policies to improve the situation.
The petitioner’s lawyer, Farhan Azhar, said that an appeal has been filed.
“We have asked for reduction of taxes to 15%. We have cited examples of taxation in the US, Canada, European countries and even India. We have brought into notice the UN International Charter. We are expecting that it would be reduced further,” he said.
He added that the next hearing will take place on Wednesday, August 8. The bench included Justice Asif Saeed Khosa, Justice Mansoor Ahmed Malik and Justice Ijazul Ahsan.
