Budget 2017-18: Govt recommends decreasing withholding tax on automobiles

ISLAMABAD: The federal government on Friday has recommended a decrease in the withholding taxes on registration of automobiles.

Finance Minister Ishaq Dar in his speech at the National Assembly recommended decreasing withholding taxes on the registration of 850CC cars from Rs 10,000 to Rs 7,500, and on the 851CC to 1000CC cars from Rs 20,000 to Rs15, 000.

The minister has also proposed shrinking withholding tax on 1300CC cars from Rs 30,000 to Rs 25,000; however, he reiterated that the incentives are only for the tax-paying customers.

Dar also proposed reducing regulatory duty from 10% to 5% on auto parts, fans and utensil manufacturing, he also promised of announcing a package in three months in view of giving relief to the customers on the duty imposed on import of electric cars.

The Pakistan Muslim League – Nawaz (PML-N) government on Friday presented its fifth and possibly last budget before general elections in 2018, earmarking a total of Rs4,757 billion in expenditures for the next fiscal year.

"For the first time in Pakistan's history, an elected prime minister and finance minister are presenting their fifth budget. This shows the strengthening of democracy in the country," the minister said as he began presenting budget on the floor of the National Assembly.

Pakistan was on the verge of defaulting in 2013 and the economy was declared unstable on the basis of macroeconomic indicators, recalled Dar.

"Today, the country's foreign exchange reserves are adequate enough for four months of imports. The supply of gas has improved, and load shedding has been completely halted for the industries. Inshallah, load shedding will end for good come next year," he added.

"Today, reputable organisations like PricewaterhouseCoopers are saying that Pakistan will enter the G-20 group of nations in the near future," claimed Dar.

The GDP growth rate was was 5.3% in the last fiscal year — highest in ten years, he stated, adding that it is for the first time that Pakistan's economy has grown to over $300 billion. "This shows the strengthening of the economy," said Dar.