Cars in Pakistan are likely to become more expensive after this year’s budget after future hike in withholding tax.
The development is worrying for both buyers and sellers as car sales are now poor in this fiscal year as prices are already in no-man’s land.
The country’s apex tax collection authority FBR proposed hike surge in withholding tax for vehicles with an engine capacity of 850cc or higher in the upcoming budget for the fiscal year 2024-25.
Under the renewed offer, people are also seeing to jack up the advance tax on cash extractions from banks by non-filers. The government has also conferred the revision in taxes with International Monetary Fund (IMF) for a bailout package.
Unofficial sources told the media that tax will be raised from current 0.6 percent to 0.9 percent for non-filers starting from the new fiscal year. If approved by assembly, this change could lead to an additional Rs15 billion in revenue from non-filers.
The current government will present federal budget for FY2024-25 on June 7 this year, with total projected expenditure of Rs16,700 billion. Interest and loan repayments are estimated at Rs9,700 billion, while grants are likely to reach Rs1,500 billion.
Tax revenue is expected to exceed Rs11,000 billion, with direct taxes contributing Rs5,300 billion, federal excise duty yielding Rs680 billion, sales tax generating over Rs3,850 billion, and customs duty expected to bring in more than Rs1,100 billion.
