FBR may impose 18% sales tax on locally-manufactured cars
- Board reviewing budget proposal to amend Eighth Schedule of the Sales Tax Act 1990
ISLAMABAD: The government is likely to impose standard rate of 18 percent sales tax on locally manufactured or assembled motorcars having engine capacity 850cc in budget (25-26).
In this connection, the Federal Board of Revenue (FBR) is reviewing the budget proposal to amend the Eighth Schedule of the Sales Tax Act 1990.
Presently, 12.5 percent sales tax is applicable on locally manufactured or assembled motorcars of cylinder capacity up to 850cc. In case FBR’s proposal is approved, the FBR will delete entry number 72 of the Eighth Schedule of the Sales Tax Act 1990.
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It is a revenue generation measure for 2025-26 as the FBR is reviewing all sales tax exemptions and lower rates to bring them at part with the standard rate of sales tax from 2025-26, officials added.
The goods specified in the Eighth schedule shall be charged to tax at such rates and subject to such conditions and limitations as specified therein, Sales Tax Act 1990 added.
Copyright Business Recorder, 2025
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