Budget 2019-20 Impacts Automobile Industry of Pakistan; Here is How

The first federal budget of the government of Tehreek-e-Insaf (PTI) was announced in the National Assembly which turned out to be a bit of both positive and negative news for automobile sector of the country. Here is how budget 2019-20 will impact automobile industry of Pakistan now.

The key highlight of this budget plan was the expansion of Federal Excise Duty (FED) on cars of different categories. The proposed FED for all cars will follow as stated below.

  • • 2.5% FED on cars up to 1000 cc engine displacement
  • • 5% FED on cars between 1001 cc and 2000 cc engine displacement
  • • 7.5% FED on high-end cars i.e. 2001 cc and above.

Recently, the government had imposed 10% FED on locally manufactured cars of 1700 cc engine displacement and above through the Finance Supplementary Bill 2019. It was being considered that the government is looking to withdraw this 10% FED in its first budget but things have gone entirely different. However, the proposed imposition of FED duties has only expanded the scope of taxation by bringing entire category of cars under amount of duty. Note here that the cars between 1700 cc and 2000 cc will now be charged with 5% FED rather than the old 10% FED. Moreover, 10% FED on cars over 2000 cc will also be reduced to 7.5% according to the latest proposed duty.

Clearly, potential buyers of cars in Pakistan over 1700 cc will be benefited from the budget in 2019-20. However, the consumers of cars ranging between 660 cc and 1699 cc will have to bear the additional duty charges which never existed before.

To sum it up, it’s a mixed pack of good news for the rich and bad for a large proportion of the population, to say the least.

Please also note that all cars price in Pakistan will undergo changes. Let’s have a look below.

These are the expected increases and decreases for various car categories’ price in Pakistan. If the National assembly already approves the FED plan then these prices will be applicable on all cars from 1st July 2019. So you have a pretty good chance to get your cars bought now (if you have nay on wishlist) before the duties get applied on. Also comment your thoughts over the imposition of new duties on cars price in Pakistan and ask us any query you have, in the comment section below.

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