The federal government has given several types of tax exemptions on vehicles in the budget for the financial year 2021-22.
According to Finance Minister Shaukat Tareen, value added tax on locally manufactured vehicles is being abolished. Manufacturers of existing vehicles and new models are being exempted from advance customs duty. Customs duty for electric vehicles is being reduced for one year. The budget proposes a reduction in taxes on certain types of locally manufactured heavy motorcycles, trucks and tractors.
The budget 2021-22 proposes to reduce the sales tax rate for electric vehicles from 17% to 1%. In addition, 850 cc vehicles are being exempted from federal excise duty while imported vehicles up to 850 cc are being exempted from customs and regulatory duties.
