Chery Pakistan has announced a price increase for its popular Tiggo 4 Pro and Tiggo 8 Pro SUV models, effective from July 1, 2024.
The price hike is attributed to the implementation of a new withholding tax regime introduced by the Federal Board of Revenue (FBR) for the purchase or registration of new vehicles.
The FBR’s revised tax structure shifts the focus from engine capacity to the overall value of the vehicle, resulting in higher tax burdens for consumers. As a consequence, Chery Pakistan has had to adjust the prices of its Tiggo models to reflect the increased costs.
Increased Price of Tiggo 4 Pro:
The Tiggo 4 Pro now carries a price tag of Rs 6,930,000, marking a Rs 31,000 increase over the previous price. The freight and insurance charges are included in price. The Withholding Tax is Rs 139,986 for tax filers and Rs 419,958 for non-filers.
Increased Price of Tiggo 8 Pro:
Similarly, the Tiggo 8 Pro has witnessed a price hike of Rs 35,000, with its new ex-factory price standing at Rs 9,585,000. This new price includes freight and insurance charges. Buyers will also need to pay a Withholding Tax of Rs 193,617 if they are tax filers, or Rs 580,851 if they are not tax filers.
The updated withholding tax rates for new 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
This progressive tax structure aims to ensure a fair distribution of tax burdens among vehicle buyers, corresponding to the diverse price ranges and capabilities of different models.
Under Section 231B of the Income Tax Ordinance, 2001, all registering authorities within the Excise and Taxation Department must collect advance tax at the time of vehicle registration. Importantly, officials from the Federal Board of Revenue (FBR) have clarified that no advance tax will be collected beyond five years from the date of the initial registration, as specified by the ordinance.
The introduction of this new tax regime for motor vehicles demonstrates the government’s dedication to updating fiscal policies to reflect economic conditions and ensure fairness to taxpayers. The FBR expects that the revised withholding tax rates will enhance revenue collection efforts while fostering transparency and accountability in the motor vehicle sector.