Pak Budget 2017-18: Withholding Tax on Cars Decreased for Tax Payers

car tax
car tax

In the current year’s budget government proposed a reduction of withholding tax on cars to encourage taxpayers. For 850 CC cars the tax will be reduced to Rs 7500 from Rs 10000, 1001 CC to 1300 CC car’s tax reduced by Rs 5000 to Rs 25000, 851 CC to 1000 CC car’s tax is also reduced by Rs 5000 to Rs 15000. The new rates are only applicable to fillers of tax but not for non fillers, non fillers will be subject to the same rate of tax according to the government. The government also provided the exemption from advance tax collection o vehicles under the Youth loan scheme, this approach is aimed to reduce unemployment (YUSUFZAI, 2017).

Sales Tax Reduction on Hybrid Vehicles:

Government has reduced the sales tax on the imports of Hybrid electric vehicles to promote the use of such vehicles in Pakistan; the reduced rates are applicable immediately.

Why Hyundai to Set up Auto Manufacturing Plant in Pakistan

Other proposals related to Auto sector:

Following are the proposed measures:

  • According to the proposed reduction in taxes the tax on 1801 CC and 2500 Cc cars will receive 25% concession and 50% concession will be given to cars up to1800 CC.
  • To promote arrest environment degradation and fuel conservation the policy of Auto development 2016-17 provides incentives to vehicle contains electrical power.
  • To promote the production electrical cars locally there is 5% concession is given by the government on ten components(YUSUFZAI, 2017).



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