FBR slaps 25% sales tax on high-end local vehicles

The Federal Board of Revenue (FBR) has imposed a 25% sales tax on locally manufactured or assembled vehicles after the federal government revised the descriptions of locally manufactured or assembled automobile goods. 

This decision was announced on Friday through the issuance of SRO 370(I)/ 2024, amending the earlier SRO 297(I)/ 2023.

The amendment specifies that the 25% sales tax applies to locally manufactured or assembled vehicles with an engine capacity of 1400cc or more and a price above Rs 4 million (excluding sales tax). This also includes double cabin (4x4) pick-up vehicles.

According to the recent updates, the PCT code 87.03, previously applicable to locally produced or assembled SUVs and CUVs, will now extend to vehicles manufactured or assembled locally with an engine capacity of 1400cc and above.

Additionally, this PCT code 87.03 will also encompass locally produced or assembled vehicles priced above Rs4 million, not including sales tax.

The PCT code 87.04, which pertains to locally produced or assembled double cabin (4x4) pick-up vehicles, remains unchanged.

The FBR said that this tax rate aligns with the charge on certain imported goods and their supply or retail price.