Given that the government raised the General Sales Tax (GST) on vehicles with 1,400CC or larger engines from 18% to 25%, it appears that another price increase is imminent.
However, it was previously thought that some crossover SUVs with engines under 1400CC might not be subject to the tax increase.
Because of this, the government clearly stated in the official circular that, regardless of engine capacity, all SUVs and crossovers are subject to a 25% GST.
The finance division suggested raising the Tax on non-essential goods, including “luxury cars.”
Although the decision was still “under discussion” at the time, the earlier report could not be verified.
Prior to this, the government raised the Tax on all cars from 17% to 18%, which resulted in a spike in prices.
GST Increase on Crossover SUVs
SUVs and cars with 1400CC engines or greater may soon witness another price increase following the tax increase from 18% to 25%.
The local currency has also been devalued more, which is also likely to drive up the price of making cars.
This price increase tsunami will be more damaging than ever due to both that and the substantial tax hike.
To read our blog on “FBR calls textile exporters for moot on sales tax issues,” click here.
