ISLAMABAD: The federal government has proposed enhancement in federal excise duty (FED) on imported and locally assembled vehicles through mini-budget.
The government on December 30, 2021 presented Finance (Supplementary) Bill, 2021 to take tax measures to generate additional revenue for improve fiscal situation of the country. One of the major revenue measure is increasing the FED on imported and locally manufactured motor vehicles.
Sources said that the Federal Board of Revenue (FBR) had estimated to generate additional Rs6.5 billion through the changes.
According to the changes proposed, the FED on imported completely built unit (CBU) up to 1,000 CC the rate shall be unchanged at 2.5 per cent ad valorem.
However, CBU imported vehicles between 1001CC to 1799CC the FED has been proposed to enhance to 10 per cent from 5 per cent.
Similarly, the CBU imported motor vehicles between 1800CC to 3000CC the FED has been increased to 30 per cent from 25 per cent.
Likewise, the motor vehicles above 3000CC, the FED has been enhanced to 40 per cent from 30 per cent.
The FED on locally manufactured motor vehicles has been kept unchanged at zero per cent for engine capacity up to 1000CC.
However, motor vehicles with engine capacity between 1000CC to 2000CC and exceeding 2000CC, the FED has been enhanced to 5 per cent from 2.5 per cent and enhanced to 10 per cent from 5 per cent, respectively.
The Federal Board of Revenue (FBR) said that the FED has been announced to increase to 30 per cent from existing rate of 25 per cent on import of double cabin (4X4) pick-up vehicles.
Similarly, the FED on locally manufactured double cabin (4X4) has been increased to 10 per cent from existing rate of 7.5 per cent.