The federal government has decided not to raise the sales tax on locally manufactured or assembled cars with engine capacities up to 850cc, reliable sources told ProPakistani.
Authorities have reportedly dismissed previous recommendations to increase the sales tax on small vehicles from 10–12.5% to 15–18% in the upcoming budget.
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Sources also indicated that the FBR may retain entry number 72 of the Eighth Schedule of the Sales Tax Act 1990, ensuring that the reduced sales tax rate for small, locally made or assembled cars stays in place.
Meanwhile, the IMF has urged Pakistan to impose a carbon levy in the upcoming budget on petrol, diesel, and internal combustion engine vehicles over 850cc. A final decision on this proposal is expected early next week.
The IMF estimates that this carbon tax could raise at least Rs. 25 billion annually by targeting fossil fuel consumption and high-emission vehicles.
