The automobile sector in Multan is experiencing a severe crisis due to the new vehicle tax implemented in the federal budget 2024-25. The advance tax, set at 0.2% on vehicle invoices, has caused a significant rise in car prices, resulting in a dramatic slowdown in business.
Impact on car dealers and buyers:
Car dealers and enthusiasts in Multan are expressing their frustration and concern over the new tax. The increase has affected not only the sale of new vehicles but also the prices of existing inventory, putting a strain on their businesses. Rana Kaleem, vice president of the Car Dealers Association, highlighted the issue: “Earlier, there was a fixed tax, but now it has been added to the invoice. Although it is 0.2%, it varies for each vehicle and is not negligible.” He also mentioned that the withholding tax has been increased, further impacting the business adversely.
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Buyer concerns:
Potential car buyers are facing significant challenges due to the tax increase. Muhammad Imran, a local citizen, shared his frustration: “I have been visiting showrooms for four days, but I cannot find affordable Japanese cars. The prices of the available ones are so high that I cannot buy them, and the rates of local cars have also increased.”
Business slowdown:
Car dealers report that the new invoice tax has led to an increase in car prices, severely affecting their business. The once-thriving market for both new and old vehicles has come to a near standstill, with fewer buyers able to afford the increased costs.
