Pakistan can reduce sales tax on 800cc vehicles to 12.5%
ISLAMABAD – The federal government is in talks with the International Monetary Fund (IMF) on a proposal to reduce sales tax on locally assembled vehicles up to 800cc as part of the upcoming automobile policy, according to reports.
The government has proposed to reduce the sales tax rate on these vehicles from 18% to 12.5%.
The IMF had initially raised objections to the proposed cuts, but consultations are ongoing between the two sides before finalizing the policy.
Prime Minister Shahbaz Sharif has directed the concerned authorities to prepare an investor-friendly auto policy aimed at encouraging new investments and creating employment opportunities in the automobile sector.
The upcoming policy is expected to focus on improving the competitiveness of Pakistan’s auto industry by introducing globally recognized vehicle safety standards. The government plans to align locally manufactured and imported vehicles with 62 international safety regulations as per UN guidelines.
Reports state that the policy will include measures to promote electric vehicles, hybrid vehicles, and plug-in hybrid electric vehicles. It may also introduce a carbon tax on engines used in locally produced petrol and hybrid vehicles.
The announcement of the new auto policy is expected in August after completing consultations with stakeholders including the IMF.
The post Pakistan can reduce the sales tax on 800cc vehicles to 12.5% appeared first on Daily Pakistan English News.
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