New tax rates on car registration from July 01, 2022

KARACHI: The new rates of advance tax on registration of motor cars have been notified through Finance Act, 2022.

According to PwC A. F. Ferguson & Co. the new rates of advance tax on registration of the motor vehicles are as follows:

Engine Capacity Up to 850cc: old rate Rs. 7,500: new rate Rs. 10,000

Engine Capacity 851cc to 1,000cc: old rate Rs. 15,000: new rate Rs. 20,000

Engine Capacity 1,001cc to 1,300cc: old rate Rs. 25,000: new rate Rs. 25,000

Engine Capacity 1,301cc to 1,600cc: old rate Rs. 50,000: new rate Rs.50,000

Engine Capacity 1,601cc to 1,800cc: old rate Rs. 75,000: new rate Rs. 150,000

Engine Capacity 1,801cc to 2,000cc: old rate Rs. 100,000: new rate Rs. 200,000

Engine Capacity 2,001cc to 2,500cc: old rate Rs. 150,000: new rate Rs. 300,000

Engine Capacity 2,501cc to 3,000cc: old rate Rs. 200,000: new rate Rs. 400,000

Engine Capacity Above 3,000cc: old rate Rs. 250,000: new rate Rs. 500,000

Where engine capacity is not applicable and value of vehicle is Rs. 5 million or more: old rate Nil: new rate 3 per cent of the import value (as increased by sales tax, customs duty and FED) or invoice value in case of locally manufactured vehicle.

The Finance Act, 2022 has also imposed advance tax of Rs. 20,000 on transfer of motor vehicles of unspecified engine capacity (e.g. electric vehicles) having value of Rs. 5 million or more. The said rate of Rs. 20,000 shall be reduced by 10 per cent each year from the date of first registration in Pakistan.

For the purposes of tax collection under section 231B, the definition of ‘motor vehicles’ has been amended and now defined to include car, caravan automobiles, jeep, limousine, pickup, sports utility vehicle, trucks, vans, wagon and any other automobile excluding:

(i) a motor vehicle used for public transportation, carriage of goods and agriculture machinery;

(ii) a rickshaw or a motorcycle rickshaw and

(iii) any other motor vehicle having engine capacity upto 200cc.