Govt to Impose New 10% Car Levy

The Pakistani government, under Prime Minister Shehbaz Sharif, is set to introduce a new Automotive Development Levy on imported and locally assembled vehicles. This levy targets specific engine capacities, with cars between 1,001cc and 2,000cc facing a 2 percent levy, while vehicles exceeding 2,000cc will bear a 10 percent levy.

Cars with engines smaller than 1,000cc will be exempt from this levy. Two- and three-wheelers, as well as agricultural tractors, will also be subject to a zero rate. The new levy would apply to internal combustion engine vehicles within the specified categories. The proposed rates include 2 percent for prime movers, excluding agricultural tractors, trucks, and light commercial vehicles, and buses and vans.

The draft policy, currently pending final approval, outlines these categories and their respective levy percentages. The impact on car prices and the final implementation details, such as calculation basis and effective date, remain to be determined.