Government reduces FED on all vehicles
The government has decided to reduce the Federal Excise Duty on all vehicles above 1,000cc by 2.5%. This will affect the price of the Toyota Fortuner Sigma 4.
The Rs9.65 million SUV is expected to see a price decline of Rs224,000.
“The tax is paid by customers so the companies will have nothing to lose,” Research Analyst Taha Madani told SAMAA Digital.
A 2.5% FED was applied on cars below 1000cc; 5% was imposed on cars below 2000cc and above 1000cc; and 7.5% on cars above 2000cc. All these categories will now see a price decline of 2.5%.
This means 1000cc cars will have no FED. Cars above 1000cc but below 2000cc will have a FED of 2.5%, and cars above 2000cc will have a FED of 5%.
Initially, Finance Minister Shaukat Tarin had announced that the government has removed 2.5% FED on 850cc cars. Sales tax, too, was reduced from 17% to 12.5%.
The decision was taken to reduce the prices of cars in the entry-level segment. This segment is assumed to entertain middle and lower-income groups.
Later, it was announced that the duty and tax reductions were extended to 1000cc cars. Now finally, FED has been reduced on all cars.
Apart from Toyota Fortuner, the prices of 3500cc Kia Sorento may go down by Rs195,000. Toyota Corolla Grande’s price may see a decrease of Rs95,000. Honda BRV Auto’s price may go down by Rs79,000.