In Pakistan, if you go out to buy even a small new car, you must have at least ten to eleven lacs rupees in your pocket. It takes years for a middle-class salaried person to save that much money.
Three vehicles of less than 850 cc are manufactured locally in Pakistan as they were being manufactured locally, so it was expected that they would be cheaper.
Japan’s Suzuki’s Alto car and two Pakistani Companies’ Prince Pearl and United Bravo, manufactured on Chinese technology, are assembled or manufactured locally.
There are three types of Suzuki Alto. There is a difference in features. The very basic Alto VX is around Rs. 11 lacs 98 thousand. It doesn’t even have an air conditioner. There is an Alto VXR with AC which is priced at Rs. 14 lacs 33 thousand.
If you want more features, you have to buy Alto VXL which is priced at around Rs 1.633 lakh. Remember this is a small 660 cc car.
After Suzuki, Prince’s Pearl is priced at 1,149,000, while United Bravo is priced at around 1,099,000. Arsha Mir wants to buy Suzuki Alto VXR out of them but her accumulated capital does not allow her to do so.
Automakers have argued that the government charges them so much in taxes that it is not possible for them to produce a cheap car.
The government has made an effort in the budget for the current financial year to make the vehicle accessible to the common man and for this a huge tax exemption has been given on vehicles with less than 850 cc engine and electric vehicles.
After that, locally made vehicles are expected to become cheaper. So will many salaried persond will be able to buy a car easily now.
First of all, if they look the option of electric vehicle, then there are no such vehicles in Pakistan. No company is building such a car locally.
Electric vehicles will be subject to only one percent sales tax
According to Shaukat Tareen, finance adviser to the federal government, the government wants “electric vehicles to be made locally in Pakistan.” That’s why big tax breaks have been announced for companies.
On the one hand, the sales tax rate on locally assembled electric vehicles will be reduced from 17% to just 1%. Second, value added tax (VAT) will be waived on the import of electric vehicles.
Import of CKD kits for local manufacture of electric vehicles will also be exempted from VAT. CKD kits are basically car parts and parts that are imported and assembled locally to make the car.
Thus, when you do not have to pay VAT on the import of spare parts and you have to pay only one percent sales tax on the sale of the car after it is ready, then the price of this car will definitely be lower.