In a recent announcement, Finance Minister Ishaq Dar presented the budget for the fiscal year 2023-24, outlining several significant proposals to bolster the economy. The budget includes the implementation of new taxes amounting to Rs223 billion, aimed at generating additional revenue for the government.
Simultaneously, the proposed budget also entails a reduction in taxes on various items, including hybrid vehicles. However, it maintains the existing tax and duty rates on both locally manufactured and imported smartphones.
The decision to keep the taxes unchanged on smartphones signifies a period of stability in the prices of these devices, both locally produced and imported. Prior to the budget announcement, speculations were rife that the government would decrease taxes on smartphones in the upcoming fiscal year. However, the decision to maintain the current tax rates brings relief to consumers and manufacturers alike.
Importantly, the budget papers reveal a noteworthy adjustment in the customs tax (CD) on the import of hybrid electric vehicles (HEVs). The tax rate on completely built-up (CBU) HEVs has been reduced to a mere 1%, indicating a strong push towards promoting the adoption of hybrid vehicles.
Additionally, the customs tax on the import of completely knocked down (CKD) units for both HEVs and plug-in hybrid electric vehicles (PHEVs) has also witnessed a reduction.
Specifically, the customs tax for importing HEV CKDs stands at 4%, whereas the import of PHEV CKDs incurs a 3% customs tax. This adjustment is anticipated to have a profound impact on the overall cost of hybrid vehicles within the Pakistani market. Consequently, it is expected to encourage numerous new businesses to venture into the hybrid car industry, contributing to its growth and development.
In addition to these measures, the budget sets a target of 3.5% GDP growth for the upcoming fiscal year. This ambitious goal signifies the government’s commitment to revitalizing and strengthening the country’s economy.
By introducing various tax reforms and strategic reductions, the budget aims to stimulate economic activity, attract foreign investment, and create a conducive environment for businesses to thrive.
The finance minister’s budget announcement has generated optimism among citizens and businesses, as it offers a comprehensive plan to propel economic growth and stability.
The proposed tax adjustments on hybrid vehicles and the decision to maintain smartphone taxes at their current rates are expected to have a positive impact on both consumers and industry players.
As Pakistan looks forward to the fiscal year 2023-24, the implementation of the proposed budget measures will play a crucial role in realizing the country’s economic aspirations.
