Karachi, July 3, 2024 – The Sindh government has issued updated motor vehicle tax rates under the Sindh Finance Act, 2024. These new rates, applicable from July 1, 2024, aim to standardize the tax regime for both imported and locally manufactured vehicles, reflecting the government’s strategy to balance revenue generation with promoting local automotive industries.
Key Updates on Tax Rates
Imported Vehicles:
1. Engine Capacity 3000cc and Above: Owners of imported motor cars and jeeps with an engine capacity of 3000cc and above will now be required to pay a tax of Rs 450,000 at the time of registration.
2. Engine Capacity 2000cc to 2999cc: For vehicles with an engine capacity ranging between 2000cc and 2999cc, the tax rate is set at Rs 275,000.
3. Engine Capacity 1500cc to 1999cc: Vehicles in this category will incur a tax of Rs 100,000.
Locally Manufactured or Assembled Vehicles:
1. Engine Capacity 2000cc and Above: For locally manufactured or assembled motor cars and jeeps with an engine capacity of 2000cc and above, the tax rate is Rs 50,000.
2. Engine Capacity 1500cc to 1999cc: For this category, the specifics of the tax rate have not been detailed in the initial release.
Implications and Reactions
The revision in tax rates is part of a broader fiscal strategy aimed at increasing the provincial revenue and promoting local manufacturing. By setting a significantly lower tax rate for locally manufactured or assembled vehicles compared to imported ones, the Sindh government is making a clear push towards supporting the domestic automotive industry.
Car buyers and industry stakeholders have mixed reactions to these updates. While local manufacturers welcome the move as a boost to their sales and market share, consumers eyeing imported vehicles express concerns over the higher financial burden. This policy shift is anticipated to influence purchasing decisions, potentially driving up demand for locally produced cars.
Dealers and automobile experts suggest that the increased tax rates on imported vehicles could also have a ripple effect on the overall market, potentially leading to higher resale values for used cars within these categories. However, they caution that the full impact will only become clear as the market adjusts to the new rates.
