New Withholding Taxes on Locally Made Cars in Pakistan

ISLAMABAD – Pakistani government imposed new tax policy on new local cars, and the new taxes are based on engine size, car’s invoice price, with taxes going as high as 30percent of total value.

The new policy puts a line between Filers and Non-filers, with Non-filers subject to higher WHT percentages than Filers. For cars below 800cc cars the tax is 1.5percent of total value.

The government also raised WHT rate for cars exceeding 2,000cc. This policy impacts both affordable and high-end cars like Alto, WagonR, and Cultus. For instance, buying a WagonR VXL would previously incur Rs20,000 for Filers and Rs60,000 for Non-filers in WHT.

Under the new policy, filers now pay 1pc of WagonR’s invoice price, Non-filers pay 3pc, resulting in Rs31,000 and Rs102,000 respectively. Commercial vehicles such as the Suzuki Ravi will see reduced WHT rates under this policy, paying Rs9,000 instead of Rs10,000 for Filers and Rs27,000 instead of Rs30,000 for Non-filers.

New Withholding Tax on Cars