The Federal Board of Revenue (FBR) has revised its withholding tax regime, effective July 1, 2024, resulting in increased costs for owning a new Changan Oshan X7.
This change shifts the tax burden based on vehicle value rather than engine capacity, impacting one of Pakistan’s most popular SUVs.
Details of the New Withholding Tax Regime
Implemented through the Finance Act of 2024, the new regime aims to streamline tax collection by aligning taxes more closely with the vehicle’s value, departing significantly from the previous structure based on engine capacity. The new withholding tax rates for motor vehicles are as follows:
Up to 850 cc: 0.5% of the vehicle’s value
851 cc to 1000 cc: 1% of the vehicle’s value
1001 cc to 1300 cc: 1.5% of the vehicle’s value
1301 cc to 1600 cc: 2% of the vehicle’s value
1601 cc to 1800 cc: 3% of the vehicle’s value
1801 cc to 2000 cc: 5% of the vehicle’s value
2001 cc to 2500 cc: 7% of the vehicle’s value
2501 cc to 3000 cc: 9% of the vehicle’s value
Above 3000 cc: 12% of the vehicle’s value
Increase in Changan Oshan X7 Prices in Pakistan
Under the new withholding tax regime, buyers of the Changan Oshan X7 will see the following price increases:
Changan Oshan Comfort: Priced at Rs 8,299,000 (ex-factory), buyers will now pay an additional 2% of the vehicle’s value as withholding tax.
Changan Oshan X7 FutureSense: Priced at Rs 8,949,000 (ex-factory), the withholding tax will be 2% of the vehicle’s value.
Impact on the Automotive Market
This tax revision is expected to significantly impact the automotive market, particularly affecting high-end SUVs like the Changan Oshan X7, a favorite among Pakistani consumers.
The increased cost due to the new withholding tax could influence purchasing decisions and potentially shift market dynamics.
Understanding these changes is crucial for potential buyers and current car owners to make informed decisions. The FBR’s move to align taxes with vehicle values rather than engine capacities marks a notable shift in policy, reflecting broader trends in automotive taxation and revenue collection strategies.