In the next budget, the federal government is said to be planning to charge Withholding Tax (WHT) on locally-made cars based on purchase price instead of engine size.
In response to these stories, the Pakistan Automotive Manufacturers Association (PAMA) has said that such a move would hurt the already suffering car industry.
In a message to the Chairman of the Federal Board of Revenue (FBR), which ProPakistani has, PAMA says that changing the base of WHT will hurt sales of cars made in Pakistan.
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PAMA has asked the FBR not to move forward with this plan because it will raise the amount of WHT on locally made cars, which will make their selling prices go up. PAMA has also asked for the engine-based WHT on cars to be lowered.
PAMA has also noticed that, with the exception of a drop during the COVID-19 years of 2019–20 and 2020–21, the car industry started to grow again in 2021–22, but the import bans caused a big drop again in 2022–23.
PAMA came to the conclusion that many of its members are losing billions of rupees because of these limits, soaring inflation, and other financial problems in the country.