The new tax regime outlined in Pakistan’s budget 2024-25 introduces a value-based tax system for locally manufactured vehicles, replacing the previous fixed tax rates.
The new change is effective from July 1 (today).
This shift aims to create a more equitable tax structure, aligning tax obligations with vehicle values.
Also read: Budget 2024-25: Revised car prices after new withholding taxes
Budget 2024-25: New tax on vehicles
- Vehicles up to 850cc will be taxed at 0.5%, replacing the fixed tax of Rs10,000.
- Vehicles from 851 to 1000cc will incur a 1% tax, instead of the fixed Rs20,000.
- Vehicles from 1001 to 1300cc will be taxed at 1.5%, compared to the earlier Rs25,000 fixed rate.
- Vehicles from 1301 to 1600cc will see a 2% tax rate, replacing the Rs50,000 fixed tax.
- Vehicles from 1601 to 1800cc will be taxed at 3%, up from the fixed Rs150,000.
- Vehicles from 1801 to 2000cc will face a 5% tax rate, instead of the fixed Rs200,000.
- Vehicles from 2001 to 2500cc will now have a 7% tax rate, increased from the previous 1%.
- Vehicles from 2501 to 3000cc will be taxed at 9%, up from the prior 1%.
This change aims to balance the tax burden more fairly based on vehicle value, potentially easing the tax impact on lower-value vehicles while increasing it for higher-value ones.
The Chief Minister of Punjab @MaryamNSharif has affixed her signature to the fiscal year 2024-25 budget document. The Punjab government has made a concerted effort to provide amenities for the populace.#transformingpunjab #nontaxbudget pic.twitter.com/48bAEN8OZV
— Azka Amin Sheikh (@AzkaSpeaks) June 13, 2024
The International Monetary Fund (IMF) has acknowledged the budget as a positive step but urged Pakistan to take additional measures to ensure economic stability.
