In the forthcoming budget, the federal government apparently plans to charge withholding tax (WHT) on locally built cars based on invoice price rather than engine size.
The Pakistan Automotive Manufacturers Association (PAMA) has issued a warning over these reports regarding the negative effects of such a move on the already troubled car industry.
Changes to the WHT’s basis will have a detrimental effect on the sales of locally produced automobiles, according to PAMA in a letter to the chairman of the Federal Board of Revenue (FBR), which is available with sources.
PAMA Letter To FBR Chairman Regarding The Impact of Increase In Car Prices
PAMA has asked the FBR not to move forward with this proposal because it will undoubtedly result in higher WHT on locally produced automobiles and higher retail pricing. PAMA has also asked for the present engine-based WHT on automobiles to be decreased.
PAMA has also stated that the car sector began to recover during 2021–22 then plunged dramatically once more in 2022–23 as a result of the import restrictions, barring a fall during the COVID–19 years of 2019–20 and 2020–21.
According to PAMA, several of its members are suffering losses of billions of rupees as a result of these restrictions, the nation’s soaring inflation, and other macroeconomic ills.
To read our blog on “Govt. plan to impose WHT on cash withdraw in 2023-24 budget,” click here.
