Budget 2019-20 Announced- Car Prices to Increase

The government has unveiled the financial budget for the fiscal year 2019-20 earlier today. Minister of State for Revenue Hammad Azhar presented the Budget 2019-20 in the National Assembly.

Related: 2nd Mini Budget- 1800cc Car Prices to Increase

As far as the automobile industry is concerned, the major impact is due to the changes in Federal Excise Duty (FED) structure. Previously in the Supplementary Bill 2019, the government had imposed 10% FED on locally assembled vehicles of 1700 cc engine displacement and above. Although the government has now reduced the FED for 1700cc & above vehicles, but it has broadened the duty to various other vehicle segments, details of which are given below.

The new FED structure is going to have a negative impact on vehicles up to 1700cc engine capacity, which will make these cars more expensive. Bigger vehicles with 1700cc & above engines will see a decrease in price and will only fulfill a handful of buyers with strong purchase power.

Related: Government Rejects Commercial Import of Used Cars

The proposed FED if approved from the assembly will be implemented from the 1^st of July 2019, which means cars under 1700cc will see an increase in sales in June as people will rush to avail the non-existent FED on these cars. Buyers of vehicles above 1700cc might want to hold their purchasing decision for a while and wait for July for the prices of these cars to come down.

To summarize, the Budget 2019-20 will again benefit the wealthier and may not be equally beneficent for masses who buy ordinary sedans and hatchbacks.

UsmanAnsari

A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com