The sale of local cars will decrease due to the decision, the Ministry of Finance was sent a letter
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Karachi: The Pakistan Auto Industry has rejected the suggestion to increase the sales tax rate on locally produced cars at the local level and demanded that the increase in the sales tax rate be avoided.
The Ministry of Finance Shaukat Tareen, in a letter sent by the Pakistan Auto Manufacturers Association, said that the decision has been taken to increase the sales tax rate on locally produced cars at the local level by 25% in the meeting of the Economic Coordination Committee. The application of this rate will be applicable to cars with engine power of 1400 cc or more or cars with a cost of more than 4 million rupees.
According to PAMA, the government’s decision will be equivalent to killing the already dying car industry as the local industry is already in crisis due to reduced demand due to high prices.
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The industry says that the continuous reduction in the production and sales of cars produced at the local level over the past five years has led to a continuous decline and that further reduction in sales due to the increase in the sales tax rate.
PAMA has pointed out the imbalance in the policy of locally produced cars and cars to be imported, saying that on one hand, there is a discussion on the proposal to increase the sales tax on locally produced cars at the local level, while on the other hand no change is being made in the policy of imported cars, which is increasing concerns for the protection of the local industry, which is why the share of used cars with 10% share in the market has now increased to 30%.