Government Has Imposed 1% Capital Value Tax (CVT) On Cars Above 1300cc
July 6, 2022 / By Zunair Tahir / Automotive News
Beginning on July 1st, 2022, the government will apply a 1 percent Capital Value Tax (CVT) on all vehicles with engines larger than 1300 cc and battery packs larger than 50 kWh.
In an effort to include automobiles with relatively tiny yet turbocharged engines under the tax net, the government had earlier suggested a 2 percent CVT on vehicles with price tags exceeding PKR 5 Million, according to the details. Later, the plan was scaled back to a 1% CVT.
The Finance Act 2022–23, on the other hand, significantly alters how this new Capital Value Tax is portrayed. Then how?
CAR IMPACT OF CVT
Changan Alsvin
Toyota Yaris
Honda City (1.5L variants)
Toyota Corolla
Honda Civic
KIA Stonic
KIA Sportage
Hyundai Tucson
Proton X70
Chery Tiggo 4 Pro
Chery Tiggo 8 Pro
Changan Oshan X7
KIA Sorento
DFSK Glory 580 Pro
Hyundai Elantra
Hyundai Sonata
Haval Jolion
Haval H6
The tax requirements are now predicated on the engine displacement above 1300cc, and the price tag beyond PKR 5 Million is therefore wholly meaningless. Although FBR’s decrease of CVT from 2% to 1% was to the benefit of customers, these recent conditions mean that the impact on consumers will be considerably greater.
Although there has been a significant rise in the number of automobiles brought into the CVT tax net, the value of tax collection has undoubtedly decreased. Thus, the government benefits from this arrangement!
From July 2022, More Price Increases Are Anticipated For Automobiles
July 5, 2022 / By Zunair Tahir / Automotive News
The price of everything is probably going to go up in the automotive industry.
The influence of Pakistan’s economy’s unprecedented period is being felt by the business community as a whole. The cost structure of import-dependent industries has significantly increased as a result of the massive devaluation of the Pakistani rupee against the US dollar over the past two months.
The automotive sector imports its CKD kits, so the devaluation has had a particularly negative impact on the sector. Due of this, major automakers are now thinking about raising prices.
With the exception of Proton Pakistan, some of the main OEMs have already raised their pricing ahead of Eid. The Pakistani rupee, on the other hand, has lost more than 20% of its value versus the US dollar during the past two months.
Proton is the first OEM to announce their raised revised prices as a result, however only by 11 percent, which is far less than the actual impact. This is a positive move, and we wish that other OEMs who are also anticipated to raise their pricing in the upcoming week will do the same by refraining from transferring the whole cost rise onto the customers.
All car types, including hatchbacks, sedans, and SUVs, will see a price hike. Due to its higher value, the crossover SUV category would see the most impact. Due to our currency’s depreciation versus the US dollar, Korean SUVs may see price increases of up to 7.0 million Pakistani Rupee.
We can only hope that the economic situation returns to normal and stability, which is crucial to mending the business mood. This price hike will affect consumers and the industry hard, which might harm demand.
OEMs are not currently permitted to open LCs for the import of CKD Kits. However, this limitation will probably be removed once the IMF program resumes. As a result, if the PKR appreciation against the USD is sustained, the price of cars may stabilize.
MG 3 Will Debut In Pakistan With Less Than 2 Million?
July 4, 2022 / By Zunair Tahir / Automotive News
The owner of Peshawar Zalmi and a significant shareholder in MG Motors in Pakistan, Javed Afridi, has once more hinted that the MG 3 may soon be released there. Javed Afridi released a video of the MG 3 and said that the launch of the car was nearing its conclusion in a Facebook post.
Since Mr. Afridi hinted that the MG3 hatchback would cost Rs. 2 million, it has been one of the most eagerly awaited automobiles to be released in Pakistan.
The MG3 hatchback will be among the three new locally produced vehicles that MG will introduce in Pakistan this year, according to Javed Afridi. However, in his most recent video broadcast on Facebook, Afridi reiterated that the MG3 will be priced around 2 million.
He adds that the MG3 is nearing completion, indicating that the car will soon be introduced to our market. The MG3 hatchback is seen in several angles during the 19-second short clip, but no technical information has been provided just yet.
Remember, this is Javed Afridi’s fourth conversation about how much this hatchback costs. In February 2021, he initially hinted the arrival of this automobile for less than Rs. 2 million, which created a lot of hype. But after a long period of silence, he finally provided another update and late this month once more asked for estimates of the MG 3’s price.
What do we currently know?
You should be aware that MG Pakistan has never publicly announced any update or probable launch date. Even then, we let you know that MG wouldn’t be carrying this car in its lineup. Javed Afridi looks to be transporting the automobile to the local used car lot, though.
Even though MG Pakistan produced the HS and ZS locally, not a single one has been sold. Although Afridi has tweeted footage of MG cars being put together, none of them have been delivered to dealers. The company’s past is therefore not in its favor. Additionally, analysts in the industry claim that MG still does not have a license to sell CKD cars because it has not satisfied the government’s requirements for Greenfield status.
MG3 SPECIFICATIONS:
The vehicle is offered on the global market in its second generation. Both a 5-speed manual and a 4-speed automatic transmission are available for its 1.5-liter engine. The automobile boasts a sleek appearance and a number of high-end amenities, including:
Cruise Control
8″ touchscreen infotainment screen
Rear Parking Sensors
Six Airbags
Emergency Braking Assistance
Hill Hold Control
Tire Pressure Monitoring System (TYPS)
We will have to wait to find out whether Javed Afridi will be able to live up to the expectations or if the 2 million price was merely a ploy to get a lot of bookings followed by a significant price hike before delivery, which is seen as a regular formula for generating great cash in our market. Please share your thoughts on Javed Afridi’s most recent MG3 teaser by leaving a comment.
Lanzante Teased With McLaren P1 Spider, Only Five Units Will Be Made
June 24, 2022 / By Zunair Tahir / Automotive News
Teaser for the McLaren P1 Spider by Lanzante
Even though McLaren stopped making the P1 in December 2015, here we are, almost seven years later, with word of a new version. It does, however, originate in Lanzante rather than Working. However, Paul Howse and the British engineering company collaborated to create the P1 Spider. If you haven’t heard of him, he was intimately engaged in creating one of the Holy Trinity’s three members.
Buttresses Made Of Carbon Fibre Will Be Added To The Open-Top Hypercar
McLaren P1 Spider By Lanzante Teaser
Since the Spider is primarily a modification based on an existing vehicle, the open-top variant does not constitute a continuation of P1 manufacturing.
Only five will ever undergo the transformation, which includes carbon fiber buttresses with specially created air intakes. Since the original hypercar featured a roof scoop, which is obviously no longer the case, these were required.
The P1 Spider’s glass roof panels are now gone, but Lanzante has designed a retractable roof cover in case the owner wants to continue driving the car in the rain. To preserve the original’s flowing lines as much as possible, the front wings, doors, and engine cover have all been subtly altered. The two turbochargers are fed directly by those aerodynamically enhanced buttresses that we described before. To maintain the structural stiffness of the typical automobile, the bottom portion of the chassis has been altered.
By replacing the seats’ leather upholstery, Lanzante has also modernized the interior. Also available is something dubbed SuperFabric, which is more weather and UV resistant now that the cabin is outside. The final touches include glossy black switchgear and carbon fiber embellishments with a satin finish.
The McLaren P1 Spider kept the original car’s formidable hybrid configuration despite being softened on the opening day of the 2022 Goodwood Festival of Speed. It has 900 Newton-meters (664 pound-feet) of torque and 903 horsepower. The coupe’s highest speed was 217 mph (350 km/h), and it reached 0 to 62 mph (100 km/h) in 2.8 seconds, 0 to 124 mph (200 km/h) in 6.8 seconds. Performance numbers have not been released.
Before the year is over, Lanzante promises to deliver the first droptop P1.
The First Online Antique Car Museum In Pakistan Has Opened
May 19, 2022 / By Zunair Tahir / Automotive News
At the unveiling of Pakistan’s first online Antique Cars Museum at the Quaid-i-Azam House Museum here on Saturday, all of the country’s top antique automobile collectors were there, along with their cherished treasures.
Karim Chhapra was there with his resurrected 1924 Rolls Royce Silver Ghost, in which the Quaid-i-Azam had also travelled while it was owned by the Nawab of Bahawalpur.
He told Dawn that there has always been a demand for an online museum dedicated to the country’s antique and classic cars. “We, the collectors of these automobiles, were even promised land for a vintage car museum in Karachi, which never materialized.” So, because we don’t have the property, we’ll have to make do with an internet museum,” he explained.
Another antique automobile collector, Liaquat Malik, who was there with his 1961 ivory white Mercedes 190 SL and his brilliant yellow 1951 MG TD, remarked that because it was the age of social media, such a museum was necessary. “We will show the world our automotive legacy,” he stated.
Mansoor-ul-Islam, who is famed for hand-building historic vehicles, arrived in his ivory 1938 Rolls Royce Wraith. He also believed that such a museum would be a fantastic idea.
The idea for the online museum occurred to Shoaib Qureshi during the Covid-19 lockdowns two and a half years ago, he claimed. “We frequently attend vintage car exhibitions to promote our interest and our magnificent automobiles with the general public, but we needed a single platform for this purpose where we could display the majority of our vehicles.” This is the first online museum for vintage automobiles in Pakistan, where we can display the greatest of these vehicles not only in Pakistan but throughout the world,” he added.
“Look about you,” he added, pointing to the Porsches, Jaguars, Rolls Royce’s, Mercedes, and other luxury cars parked in the Quaid-i-Azam House Museum’s u-shaped parking lot.
“There are so many treasures here. Starting with 80 vehicles, antiquecars.com.pk will feature 100 vehicles at a time in order to retain quality above quantity. The oldest automobile on display is a 100-year-old 1922 Amilcar C4 from Islamabad, while the newest is a 35-year-old 1987 BMW two-door coupe from Karachi.
We also have Miss Fatima Jinnah’s two cars, her 1955 Series 62 Convertible Cadillac and her 1965 Mercedes Benz 200, in a virtual museum,” he said, gesturing to the two cars parked in their glass garage right there after restoration by Mohsin Ikram, president of the Vintage and Classic Car Club of Pakistan.
A 1930 Cadillac V16, 1926 Renault, 1930 Packard, 1935 Chevrolet Master, 1949 Lincoln Continental V12, 1954 Austin Healey, 1958 Corvette, 1963 Porsche 356, 1966 Aston Martin DB6 and a 1966 Amphicar are among the other worldwide rare, iconic, and costly antique vehicles in the collection.
They will have branded products in the shape of T-Shirts, hats, and other items in addition to displaying the antique automobiles and telling their histories on the museum website.
5 Easy Tips To Increase The Life Of Your Car’s Clutch
May 14, 2022 / By Zunair Tahir / Automotive Blogs
Today we’ll discuss one of the most crucial components of an automobile, without which it would never work. The vehicle’s clutch. To be clear, we will discuss non-electric vehicles because electric vehicles do not utilize transmission. To be clear, we will only discuss a manual gearbox and how to extend the clutch’s life.
How To Increase Clutch Life?
Regardless of how you look at it, because the clutch is based on friction, it will ultimately wear out and need to be replaced. However, there are a few easy steps you can do to extend its life, and the most significant reason to do so is that clutch replacement is an expensive procedure. So there you have it:
Tip # 1 Don’t Ride The Clutch
Tip # 1 Don’t Ride The Clutch
The majority of them have a propensity of resting their foot on the clutch. This is a terrible habit to get into since even the tiniest exertion causes the pressure plates to compress. As a result, some of the friction plates will come into contact, causing needless wear and strain. Make sure your foot isn’t resting on the clutch while you’re not using it. Either fully depress the clutch pedal or leave it unpressurized. This is the easiest approach for extending the life of an automotive clutch.
Tip # 2 Don’t Use The Clutch Every Time You Brake
Tip # 2 Don’t Use The Clutch Every Time You Brake
Another typical poor behavior is pressing both the brake and clutch pedals at the same time while braking. Not only does this result in superfluous clutch usage, but it also removes a significant amount of braking power from the engine. The widespread consensus is that you should utilise your clutch just before the engine starts to struggle and shut out while braking. If your car’s speed is too low for the gear picked, the basic guideline is to compress the clutch. So, if you want to slow down, only use the clutch when you need to shift gears. Keeping the clutch pushed as soon as you brake might help you slow down faster.
Tip # 3 Use Neutral While Waiting At Signals
Tip # 3 Use Neutral While Waiting At Signals
This is quite straightforward, and we’ve seen a lot of folks do it when stopping at a light. Pressing the clutch while waiting for the signal is a bad idea, even if it’s only for 5 seconds, because it increases clutch usage when you could just put the car in Neutral. Leaving the clutch pedal depressed when not in use is a guaranteed method to shorten its lifespan.
Tip # 4 Use Handbrake On An Uphill
Tip # 4 Use Handbrake On An Uphill
Many individuals use the clutch to stop their automobile from rolling backwards when stopping on an uphill slope. You won’t have enough juice left to drive ahead without jerks if you do this, and you’ll be putting a lot of strain on the clutch. Instead, take your foot off the brakes and utilize the handbrake. Release the clutch and handbrake while boosting the throttle at the same time to get going. This may appear to have a lot going on at once, but when done correctly, it is more comfortable and reduces the pressure on your clutch.
Tip # 5 Use The Clutch Only When You Have To
Tip # 5 Use The Clutch Only When You Have To
We recognize that clutching is quite important and probably on the higher side when living in congested cities. And no, we’re not asking you to abandon the clutch totally; rather, we’re advising you to use it more carefully. In the end, the clutch should only be engaged and disengaged when absolutely essential. Furthermore, if you do (dis-)engage it, do so with caution. Always attempt to keep the time you don’t fully push the clutch pedal to a minimum (as the clutch slips it will chafe against the flywheel, gently wearing it out). Avoid touching the clutch whenever possible (mostly during the highway runs).
What is Causing Pakistan’s Automobile Costs to Rise?
April 1, 2022 / By Zunair Tahir / Automotive News
The government instructed an automotive monitoring committee to conduct a forensic study of recent price spikes in various car models across the board on Thursday.
Members of the committee were requested to choose neutral professional experts for the forensic study during a high-level meeting chaired by Federal Secretary for Industries and Production Jawad Malik, and the report should be presented within two weeks.
The ministry has directed a monitoring group to conduct a comprehensive investigation of the recent increase in automobile prices.
Industry participants tell the ministry about the reasons for late deliveries and manufacturing capacity.
The car industry has been asked to submit a localization strategy by the federal secretary.
During the discussion, a ministry official asked the committee for an explanation for the recent price hikes in several automobile models in recent months.
According to the information presented at the meeting, the price increase was prompted by the following factors:
The rupee’s constant devaluation versus the US dollar
Freight rates have risen
Raw material prices are rising, as are operational costs
The government was also told by the industry players about the reasons for late deliveries and manufacturing capacity.
Malik also requested that the car sector provide a localization strategy with a time range to the ministry, as well as a report on safety features compliance.
President Empowers Suzuki Customers to Get a Refund Of Up to 12% Of Their Sales Tax Overpayment
March 17, 2022 / By Zunair Tahir / Automotive News Pakistan
Pakistan President Dr Arif Alvi
President Arif Alvi has supported the Federal Tax Ombudsman’s (FTO) decision to refund more than 12.5 percent of sales tax collected from Suzuki car customers.
Pak Suzuki was sued under Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance) for collecting 17 percent sales tax on 998cc automobiles in August 2021, despite the fact that the real rate at the time was 12.5 percent. As a result, taxpayers were compelled to pay more than was truly owed.
The judgement was confirmed by Pakistan’s President, who dismissed FBR’s appeals against the return suggestion. FTO Dr Asif Mahmood Jah, speaking during a press conference, said:
“The President’s directive will assist customers around the country who paid an excessive amount of Sales Tax from Suzuki car purchasers.”
The complainants ordered 998cc automobiles in advance of June 2021, paying a total of Rs 2.145 million in advance, with an estimated delivery date of July 2021. Meanwhile, by the Finance Act of 2021, the rate of Sales Tax on such automobiles was reduced from 17 percent to 12.5 percent, and the FED charged at 2.5 percent was abolished entirely, with effect from July 1, 2021. Furthermore, the word “time of supply” was changed from “time of sale” to “time of delivery” in Section 2(44) of the Sales Tax Act of 1990.
The automobiles were delivered to the complainants together with an invoice for Rs 2.069 million, which reflected the revised rate in effect after July 2021, rather than the rate in effect when the car was booked in June 2021. However, the firm assessed Sales Tax on the previous rates rather than the invoice date “the time of sale” and refused to refund the difference, denying Middle-Income Complainants the full benefit of the lower tax burden. The complaint also contacted FBR through email on its hotline, asking a reimbursement of the difference in sales tax.
The FBR responded by sending an email stating that sales tax on automobiles up to 1000cc had been decreased to 12.5 percent. However, the FBR did not fix the matter by arranging for a reimbursement of the sales tax difference. According to the FBR:
“At the time of reserving the car in June 2021 and its delivery in August 2021, there was a lack of clarity on the term of “time of supply.” The appropriate period for establishing the rate of taxes was when payment was received by the provider, according to the definition in June 2021, when Sales Tax was 17 percent and FED was 2.5 percent. However, in the budget 2022-2023, both the definition and the applicable tax rates were changed, and now “supply of goods, other than under hire purchase agreement, means the time at which the goods are delivered or made available to the recipient of the supply” means “the time at which the goods are delivered or made available to the recipient of the supply.”
Despite the fact that the act’s amendments were meant to assist taxpayers, the objections were dismissed. The Federal Tax Ombudsman has issued instructions to all advisors to decide all similar cases in accordance with a decision by the President of Pakistan, and FTO hopes that the Federal Bureau of Revenue will ensure prompt compliance with the President’s directives, as the decision has a far-reaching impact by providing relief to not only the complaints but many others who may not have so far opted for such relief, FTO added.
