Auto industry: FBR regulations influence cost structure, competitiveness: CCP

ISLAMABAD: The Competition Commission of Pakistan (CCP) has disclosed that the Federal Board of Revenue’s regulations in the automobile industry directly influence the cost structure, competitiveness and localization levels of assemblers and importers.

According to the CCP’s study, the automobile industry is annually contributing around Rs 302 billion in taxes through customs duties, sales tax, federal excise duty (FED), capital value tax (CVT), Income Tax and related levies.

Local manufacturing contributes an estimated Rs302 billion annually in taxes through GST, FED, customs duty, and income taxes across the supply chain. Replacing domestic production with imports would reduce this multi-layered tax base to a single customs collection point, amplifying fiscal pressures and reducing long-term revenue potential.

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The FBR, through its Inland Revenue (IR) and Pakistan Customs Wing, plays a central regulatory role in the automobile industry by administering import tariffs, taxation policies, and customs procedures. Its mandate includes revenue collection, trade facilitation, and enforcement of customs laws under the Customs Act, 1969 and related SROs. In the automotive sector, the FBR’s regulations directly influence the cost structure, competitiveness, and localization levels of assemblers and importers, the study added.

Copyright Business Recorder, 2026