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Govt to Impose WHT of Rs. 200,000 on Sale of Newly-Bought Vehicles

The Economic Coordination Committee (ECC) recently approved the imposition of additional withholding tax (WHT) on the sale of newly-bought vehicles. The tax amount ranges from Rs. 50,000 to Rs. 200,000 and it will be imposed at the first registration of a new vehicle in the name of the second buyer.

The decision was given the go-ahead after the submission of a summary by the Ministry of Industries and Production. Reportedly, the purpose of the tax is to discourage the car dealerships that were involved in charging hefty illegal premiums on the original manufacturers’ suggested retail prices (MSRP) of the vehicles.


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The ECC has approved the imposition of Rs. 50,000 WHT on 1000 cc or less cars, Rs. 100,000 WHT on 1,000 cc to 2,000 cc cars, and Rs. 200,000 WHT on vehicles with an engine displacement of more than 2,000 cc. The additional WHT will be charged to people who buy locally assembled cars from automakers and sell them within three months of delivery.

The WHT has reportedly been made applicable until June 2020 and will be made mandatory for the long term following an amendment in the Income Tax Ordinance. However, this decision is subject to clearance by the federal cabinet.

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