Owning a car in Pakistan is more than just a purchase; it’s a lifelong investment that’s not very easy to make in financial terms. The joy of driving your family around, the convenience of traveling without relying on public transport, and the pride that comes with possessing a new car are all integral parts of this. However, the harsh reality of heavy taxes on cars in Pakistan is shattering all ambitions, overshadowing happiness, and making it extremely difficult to buy a car.
In this article, we will share information about the tax on cars in Pakistan so you can have a clear picture of the duties before purchasing a car.
Automobiles are among the products that are commonly subjected to sales tax, which is a primary tariff. So, in 2024, the sales tax has been scheduled at 17 % plus the amount of the car. This duty applies a percentage to the final price you are likely to pay at the dealership.
Another tax to consider is excise duty. This tax, imposed on the production or import of automobiles, is included in the price of the car. The car’s engine capacity determines the fee; larger engines require higher costs.
You have to register your car after you buy it. Province and kind of car determine the registration charge. An annual charge known as “road tax” is necessary to lawfully use a vehicle. These two charges raise the total cost of vehicle ownership over time.
For those buying a new car, the brand-new car tax applies. This tariff is a combination of sales tax, excise duty, and other levies specific to new vehicles. It can significantly increase the overall cost.
Withholding tax is an additional cost when purchasing vehicles. Based on the car’s price, this tax is collected at the point of sale. Budgeting for this levy is crucial when making your purchase.
| Engine Size | Vehicle | Old Tariff Rate | New Proposed Rates | New Tariff | Tariff Difference |
|---|---|---|---|---|---|
| Up to 850cc | – | 10,000 | 0.5% | 12,500 | 2,500 |
| 851cc to 1000cc | Toyota Passo | 20,000 | 1% | 38,580 | 18,580 |
| 1001cc to 1300cc | Toyota Platz | 25,000 | 1.50% | 56,985 | 31,985 |
| 1301cc to 1600cc | Toyota Yaris | 50,000 | 2% | 81,585 | 31,585 |
| 1601cc to 1800cc | Toyota Corolla Cross | 150,000 | 3% | 225,270 | 75,270 |
| 1801cc to 2000cc | Toyota Corolla Altis Grande X CVT-i 1.8 | 200,000 | 5% | 346,500 | 146,500 |
| 2001cc to 2500cc | Toyota Camry | 6% | 7% | 765,100 | 765,100 |
| 2501cc to 3000cc | Toyota Hilux | 8% | 9% | 956,720 | 956,720 |
| Above 3000cc | Toyota Land Cruiser 300 | 10% | 12% | 1,139,880 | 1,139,880 |
Navigating car taxes in Pakistan is complex but essential for budget planning. Higher engine capacities and imported vehicles face steeper taxes. Staying informed about tariff rates and regulations will help manage costs and make informed decisions when buying an automobile.
Pakistan deploys different customs duties depending on the vehicle model’s engine capacity and whether it is imported from a developing country.
The duty on imported automobiles in Pakistan varies based on engine capacity and origin; check FBR for the latest rates.
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