The government has proposed significant reductions in Federal Excise Duty (FED) and customs duties under Pakistan’s new auto policy, potentially lowering the prices of petrol-powered vehicles by up to Rs1 million.
The proposed measures, introduced following Prime Minister Shehbaz Sharif’s directives, aim to provide relief to car buyers by reducing the tax burden on different categories of locally manufactured vehicles. According to media reports, the proposed tax adjustments could bring down vehicle prices by hundreds of thousands of rupees, depending on engine capacity and vehicle category.
Under the proposal, the price of a locally manufactured petrol vehicle with an engine capacity of up to 658cc could decrease by Rs375,000, from Rs3.22 million to Rs2.845 million.
Similarly, vehicles with engine capacities of up to 998cc could become cheaper by Rs440,000, bringing their proposed prices down from Rs4.27 million to Rs3.83 million.
The proposed reduction for petrol-powered SUVs with engine capacities of up to 1,496cc is Rs740,000, which would lower their prices from Rs6.06 million to Rs5.32 million.
Meanwhile, a petrol SUV with an engine capacity of 1,498cc could see a price reduction of Rs280,000, bringing its cost down from Rs9.44 million to Rs9.16 million.
The biggest proposed reduction is for petrol-powered jeeps with engine capacities of up to 1,598cc, for which prices could fall by Rs1 million, from Rs12.1 million to Rs11.1 million. If approved and implemented, the proposed tax reductions could make petrol-powered vehicles more affordable for consumers across different engine categories. However, the proposed changes have yet to receive final approval, and buyers are awaiting an official government notification confirming the revised tax rates and vehicle prices.
