The automobile sector in Multan is reeling from a severe crisis following the implementation of a new tax on vehicles in the federal budget 2024-25.

The advance tax, levied at a rate of 0.2% on vehicle invoices, has caused a significant increase in car prices, leading to a dramatic slowdown in business.

Impact on car dealers, buyers

Car dealers and enthusiasts across Multan are expressing their frustration and concern over the new tax. The increase has not only affected the sale of new vehicles, but also the prices of existing inventory, putting a strain on their businesses.

Also Read: Cement, construction material prices surge after strike, taxes

Rana Kaleem, vice president of the Car Dealers Association, highlighted the issue: "Earlier, there was a fixed tax, but now it has been added to the invoice. Although it is 0.2%, it varies for each vehicle and is not negligible."

He further said that the withholding tax already imposed has also been increased, which has had an adverse effect on the business.

Buyer concerns

Potential car buyers are facing significant challenges due to the tax increase. Muhammad Imran, a local citizen, shared his frustration:

"I have been visiting showrooms for four days, but I cannot find affordable Japanese cars. The prices of the available ones are so high that I cannot buy them, and the rates of local cars have also increased."

Business slowdown

Car dealers report that the new invoice tax has led to an increase in car prices, severely affecting their business. The once-thriving market for both new and old vehicles has come to a near standstill, with fewer buyers able to afford the increased costs.