Finance Minister Muhammad Aurangzeb unveiled the 2024-25 budget proposal, introducing significant changes to the tax structure on vehicles. The most notable change is the shift in the basis for the withholding tax (WHT) on cars. Previously, the WHT was determined by the engine capacity of the vehicle, but now it will be calculated based on the ex-factory price.
This update affects car prices across various engine capacities, ranging from 660cc to 2,000cc. Let’s dive into how the new budget impacts different car models in Pakistan.
Car Prices After Budget 2024 (660-850cc)
For compact cars like the Suzuki Alto and Bolan, the new withholding tax is set at 0.50% of the ex-factory price. This results in a modest increase in the tax amount for most models. For instance, the Suzuki Alto VX, priced at PKR 2,331,000, will now have a tax of PKR 11,655, up from the previous flat rate of PKR 10,000. The highest increase in this category is seen in the Suzuki Alto VXL AGS, with a new tax of PKR 15,225, an increase of PKR 5,225.
Car Prices After Budget 2024 (851-1000cc)
Moving up to the 851-1000cc category, cars like the Suzuki WagonR and Kia Picanto now have a 1.00% WHT. For example, the Suzuki Wagon R VXR, valued at PKR 3,214,000, will see a new tax of PKR 32,140, a significant rise from the previous PKR 20,000. Similarly, the Changan Karvaan Plus will now have a tax of PKR 29,990 compared to the earlier PKR 20,000, reflecting a notable increase.
Car Prices After Budget 2024 (1001-1300cc)
For mid-sized cars between 1001-1300cc, such as the Suzuki Swift and Honda City, the WHT is set at 1.50% of the ex-factory price. The Suzuki Swift GL Manual, with an ex-factory price of PKR 4,336,000, will now incur a tax of PKR 65,040, up from the previous PKR 25,000. The Honda City 1.2L CVT’s new tax is PKR 70,335, showing a substantial increase from the previous flat rate.
Car Prices After Budget 2024 (1301-1600cc)
Cars in the 1301-1600cc range, including models like the Toyota Yaris and Honda BRV, will face a 2.00% WHT. The Toyota Yaris GLI MT 1.3, priced at PKR 4,479,000, will now have a tax of PKR 89,580, compared to the previous PKR 50,000. The Honda HR-V VTi, another popular model, will see its tax rise to PKR 152,980 from PKR 50,000, reflecting the increased burden on mid-range vehicles.
Car Prices After Budget 2024 (1601-1800cc)
For vehicles between 1601-1800cc, like the Toyota Corolla Altis and Hyundai Elantra, the WHT jumps to 3%. For example, the Toyota Corolla Altis Grande X CVT-i 1.8, priced at PKR 7,509,000, will see its tax rise to PKR 225,270 from the previous PKR 150,000. The Hyundai Elantra GL will now incur a tax of PKR 191,970, marking a notable increase from the earlier flat rate.
Car Prices After Budget 2024 (1801-2000cc)
For higher-end models in the 1801-2000cc category, such as the MG HS and Hyundai Tucson, the WHT will be 5%. The MG HS 2.0T AWD, with an ex-factory price of PKR 9,299,000, will now have a tax of PKR 464,950, significantly higher than the previous PKR 200,000. Similarly, the Kia Sportage AWD’s tax will increase to PKR 423,500 from the earlier flat rate, indicating a considerable hike for larger vehicles.
This budget proposal changes the landscape for car buyers in Pakistan. The shift to calculating WHT based on the ex-factory price means higher taxes across all vehicle categories, with the impact being more pronounced on mid to high-end cars. Buyers will need to factor in these increases when planning their purchases, as these changes aim to generate more revenue and possibly encourage a shift towards smaller, more affordable vehicles.
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