Islamabad, June 26, 2023: The National Assembly of Pakistan on Sunday, June 25, 2023, approved the budget 2023-24 allowing up to 10 percent advance tax on new motor vehicles.
The house voted in favor of revising tax rates for registration of new motor vehicles in the country by the provincial excise and taxation department and manufacturers of motor vehicles, which shall be applicable from July 01, 2023.
The approved Finance Bill, 2023 recommended amendment to Section 231B of the Income Tax Ordinance, 2001.
The new rate of advance income tax on new motor vehicles is as follow:
- The motor vehicle with engine capacity up to 850cc: the advance tax amount shall be Rs10,000.
- The motor vehicle with engine capacity between 851cc to 1000cc: the advance tax amount shall be Rs20,000.
- The motor vehicle with engine capacity between 1001cc to 1300cc: the advance tax amount shall be Rs25,000.
- The motor vehicle with engine capacity between 1301cc to 1600cc: the advance tax amount shall be Rs50,000.
- The motor vehicle with engine capacity between 1601cc to 1800cc: the advance tax amount shall be Rs150,000.
- The motor vehicle with engine capacity between 1801cc to 2000cc: the advance tax amount shall be Rs200,000.
- The motor vehicle with engine capacity between 2001cc to 2500cc: the tax rate shall be 6 percent of the value.
- The motor vehicle with engine capacity between 2501cc to 3000cc: the tax rate shall be 8 percent of the value.
- For the motor vehicle with engine capacity above 3000cc: The tax rate shall be 10 percent of the value.
Provided that the value for the purpose of serial numbers 7 to 9 of the above, shall be in case of motor vehicle-
(i) imported in Pakistan, the import value assessed by the Customs authorities as increased by customs duty, federal excise, and sales tax payable at the import stage.
(ii) manufactured or assembled locally in Pakistan, the invoice value inclusive of all duties and taxes; or
(iii) auctioned, the auction value inclusive of all duties and taxes.
Provided further that in cases where engine capacity is not applicable and the value of the vehicle is Rs5 million or more, the rate of tax collectible shall be 3 percent of the import value as increased by customs duty, sales tax, and federal excise duty in case of imported vehicles or invoice value in case of locally manufactured or assembled vehicles.
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