Federal Board of Revenue (FBR) has increased regulatory duties on 500 items including electronics, milk products, kitchen items, cars, fruits, and vegetables. It has imposed upto 60% regulatory duties on new, old and used luxury vehicles in Pakistan.
The said move is aimed at discouraging imports of non-essential and luxury items and increase the revenue collection for the government.
Under the new tax regime, new luxury cars belonging to 1801cc-3000cc will be paying 50% regulatory duty whereas old and used 1801-3000cc vehicles will pay 60% in duties. In order to promote hybrid cars in Pakistan, the government ahs exempted them from any such duties.
In the recent Budget 2017-18, the government has provided relief in the registration fee and customs duty for the tax return filers while no such compensation has been awarded to no-tax filers. It reduced withholding taxes on the automobiles and has maintained the tax relief of 25% on 1801cc-2500cc hybrid cars.
It is unlikely that people will stop importing luxury vehicles with the introduction if new regulatory duties but one thing is certain that it will prove to be quite a dent in the pocket. Recently, the government has approved manufacturing plants of three major auto companies in Pakistan.