Keeping in view that the prices of locally produced automobiles have been increased beyond the reach of the common man, the government announced a handful of initiatives for the automobile sector in budget 2021-22 aimed at curbing car prices.
During the announcement of the federal budget on Friday, Finance Minister Shaukat Tarin announced tax exemptions for cars having an engine capacity of 850cc.
“Rising car prices in the country have irked the common man hence federal excise duty and value added tax on locally produced cars, having engine capacities of up to 850cc, have been abolished,” said Tarin.
In addition, the government also decreased the sales tax rate on such cars from 17% to 12.5%.
He was of the view that these measures would enable people from the lower and middle class to buy their own automobiles.
“The automobile sector contributes immensely to the development of the country and the national treasury besides providing employment to millions of people,” he said.