ISLAMABAD – Car prices in Pakistan are likely to witness a decline after a long gap in upcoming budget for fiscal year 2025-26.
The federal government is expected to present the budget 2025-26 on June 2 while a final date will be announced after wrapping up talks with the International Monetary Fund (IMF) as the South Asian country is part of the Extended Fund Facility loan programme.
In the new fiscal year’s budget, a tax target of Rs14,305 billion is being considered, along with proposed tax reductions in several sectors.
Reports said consultations with IMF regarding tax proposals for the upcoming fiscal year are ongoing. In this context, reports claimed that the new budget includes a proposal to reduce taxes on vehicles and auto parts.
Expected Reduction in Customs Duty on Vehicles
As per the reports, a 20 percent reduction is proposed on duties ranging from 15 to 90 percent on vehicles. If it is approved, the car price would see a significant drop in Pakistan.
Additionally, the current 2% additional customs duty on parts is proposed to be reduced to zero. A gradual reduction is also being considered in the 4 to 7 percent slab.
A plan also is under consideration to reduce duties on industrial raw materials and semi-finished goods. These sectors include textiles, chemicals, auto parts, plastic, chemicals, iron, and the steel industry.
Meanwhile, the government has planned to generate Rs600 billion through the implementation of laws, and Rs400 billion through new measures.
On the other hand, the IMF has emphasized the need to document the economy to increase revenue.
