ISLAMABAD: Minister for Industries Khusro Bakhtiar said on Wednesday that in next two days prices of cars will decline to reflect the tax and duty cuts on automobiles in the budget for fiscal year 2022. Addressing a press conference in Islamabad with Information Minister Fawad Chaudhry on aspects of the new auto policy, the federal minister named several cars from different categories and the respective price reduction they would see.
“Implementation of new prices for all these cars will be done in a day or two,” he said, adding that a notification in this regard would be issue soon.
Minister said this would cause a sudden increase in demand in the automobile sector as well as an increase in car production. “I also want to deliver the good news that as we increase car production then around 300,000 new jobs will be provided in this [automobile] sector this year.”
Bakhtiar said efforts were being made to increase automobile production to 300,000 cars this year and increase their demand through incentives and other measures.
“The biggest incentive for this [automobile] sector was that demand increases when prices are reduced. So the government has removed federal excise duty (FED) and additional customs duty (ACD) on cars along with reduction of sales tax on small cars,” said Bakhtiar.
In the Finance Bill 2021, the government had cut FED on all vehicles up to 3,000cc by 2.5 per cent while abolishing it on vehicles from 660cc to 1,000cc. The general sales tax was also slashed to 12.5pc from 17pc for cars up to 1,000cc.
The government had also reduced ACD on all vehicles from seven to 2pc and a notification in this regard was issued on June 30. These measures were aimed at providing some relief to the customers from July 1, but so far the prices have been intact to their previous levels.