Pakistan’s government is proposing a significant change to the advance tax system for motor vehicle registration and transfer. Here’s a breakdown of the key points:
Current System:
The existing system levies a fixed advance tax based on the engine capacity of the vehicle (up to 2000 cc). Cars with larger engines have a higher fixed tax rate.
Proposed Changes:
- Tax Based on Vehicle Value: The new system proposes calculating the advance tax as a percentage of the vehicle’s total value, applicable to all engine capacities.
- Tiered Rates: The proposed tax rate increases progressively with the vehicle’s value.
Impact on Consumers:
This shift could potentially impact car buyers differently depending on the vehicle’s value and engine capacity. Some may see a decrease, while others may face a higher tax burden.
Comparison Table:
| Engine Capacity (cc) | Current Advance Tax (PKR) | Proposed Advance Tax Rate (%) |
|---|---|---|
| Up to 850 | 10,000 | 0.5% |
| 851 – 1000 | 20,000 | 1% |
| 1001 – 1300 | 25,000 | 1.5% |
| 1301 – 1600 | 50,000 | 2% |
| 1601 – 1800 | 75,000 | 3% |
| 1801 – 2000 | 100,000 | 5% |
| 2001 – 2500 | – | 6% |
| 2501 – 3000 | – | 8% |
| Above 3000 | – | 10% |
Important Note:
The proposed changes haven’t been finalized yet. It’s recommended to stay updated on official announcements for the latest tax rates before purchasing or transferring a vehicle in Pakistan.
