The new federal government has made amendments to the Finance Bill 2018-19 taking important steps to revive the economy. The Minister of Finance, Asad Umar while presenting the amendments warned that the country’s foreign exchange reserves had depleted to only two months of import cover.
Asad Umar also drew attention to the fall in the rupee’s value against the dollar, and said that difficult decisions had to be made or inflationary pressures would build up to the point that they would become painful for the average consumer.
In addition to lifting the ban on non-filers from purchasing new cars & property, many other amendments were presented in the budget. This also includes the increase in tax rate in the highest income tax slab from 15% to 29%. Furthermore the government has doubled the federal excise duty on cars of 1800cc engine capacity or more from 10% to 20%.
It is imperative to mention that this duty structure is applicable to CBU imported as well as locally assembled vehicles. However duty on commercial vehicles & vans have remained unchanged. Analysts believe this will make 1800cc & above cars much pricier but since these aren’t considered as mass-market cars, common buyers won’t be affected.
Car dealers and automakers have appreciated the current government’s step to allow non-filers to buy new cars, as it’s a huge relief for both automakers and consumers alike. Stocks in the automobile sector gleamed at the Pakistan Stock Exchange on Tuesday with an increase in more than 5% of value because of the revised finance bill lifting the ban on purchase of new cars by non-filers.
What is your take on government’s measure to increase the duty on 1800cc & above cars, let us know with your comments.