Federal cabinet approves up to Rs200,000 additional tax on new vehicles

The additional tax on new vehicles may affect Pakistan's auto industry.–File photo

The federal cabinet on Tuesday approved a proposal to impose an additional tax on purchase of new vehicles.

Also, the cabinet approved the proposal to impose a new tax on the sale of used vehicles if they are sold within three months of purchase. Sources say there will be a Rs50,000 tax on the purchase of new vehicles up to 1000 cc, Rs100,000 on the purchase of new vehicles between 1000 cc to 2000 cc. There will be Rs200,000 additional tax on purchase of new vehicles above 2,000 cc.

This additional withholding tax on sale and purchase of vehicles will be applicable until June 2021. Sources said the additional tax on the purchase of new vehicles will save people from “own” on new vehicles.

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