The proposed budget doubles the advance income tax on automotive imports. In addition, the government intends to levy a withholding tax on automobile purchase receipts rather than engine capacity.
In addition, the new budget proposes an increase in the regulatory extra customs duty (ACD) on imported cars. According to a media report citing official papers, the goal for domestic exports in the current budget is $30 billion, while imports are set at $58.70 billion.
According to the records, the trade imbalance for the following fiscal year will be $28.70 billion. The current account deficit is anticipated to be $6 billion, according to the records.
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Automobile Manufacturers’ Representations
The Pakistan Automotive Manufacturers Association (PAMA) has warned of the negative repercussions of tax increases.
PAMA cautioned the Chairman of the Federal Board of Revenue (FBR) in a letter that changing the foundation of WHT would harm sales of locally manufactured vehicles.
Pak Suzuki Motor Company (PSMC) has wrote a letter directly to Pakistan’s interim Prime Minister, Mian Shahbaz Sharif, demanding that the aforementioned plan not be approved.
The company stated that the local auto industry is experiencing “the worst of times,” with multiple carmakers “on the verge of closure.” The administration has yet to reply to these pleas for help.
