Lucky Motor Corporation Limited (LMCL) has issued a press release clarifying price hike rumours circulating in the media.
According to the official statement, the company made no changes to the ex-factory prices of its vehicles.
However, with the exception of the Kia Picanto, the purchase price of all cars has risen slightly since the implementation of a 1% capital value tax (CVT) on engines larger than 1300cc.
About CVT
The federal government recently imposed a Capital Value Tax on all high-end vehicles. Previously, the tax was set at 2%.
However, it may have increased the price to the public’s detriment. As a result, the Federal Board of Revenue (FBR) has reduced the CVT tax from 2% to 1%. Even though the tax has been reduced, it will have a negative impact on the market.
Effective July 1, 2022, the federal government will impose a 1% CVT on cars with engines larger than 1300cc and electric vehicles (EVs) with battery packs larger than 50 kWh.
It had initially proposed a 2% CVT on vehicles costing more than Rs. 5 million. Its goal was to levy taxes on high-end vehicles equipped with turbocharged engines, such as the Proton X70, MG HS, Haval Jolion, and H6.
According to various reports, the FBR reduced the CVT from 2% to 1% to benefit the public. However, the market believes that the new tax will make things worse for buyers of mid-range and economy vehicles.
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