In its budget plan for the fiscal year 2023-24, the Pakistani government has suggested removing fixed duties and taxes on imported used cars from Asia exceeding 1300cc in engine size.
Since 2005, a cap on duties and taxes had been in place for imported used vehicles up to 1800cc. However, the proposed removal of this cap is expected to escalate the costs of imported used cars as customs officials will then have the discretion to levy duties and taxes based on the vehicle’s actual value.
This move is integral to the government’s strategy to increase revenue and shrink the country’s budget deficit. The government is also under pressure from the International Monetary Fund (IMF) to institute economic reforms to stabilize Pakistan’s ailing economy.
With the delay in reaching an agreement with the IMF and the ongoing economic woes, Pakistan’s economy is navigating through choppy waters. Although the IMF has been aiding Pakistan financially since 2019, the government has found it challenging to meet the conditions stipulated for continued support.
The budget for the fiscal year 2023-24 is under intense scrutiny from economists and investors alike, as it serves as an important barometer of the government’s capacity to enact necessary reforms and stabilize the nation’s economy.
The government has presented various strategies, encompassing tax hikes, spending cuts, and increased privatization. However, it’s uncertain if these measures will satiate the IMF’s expectations and ward off a potential default on Pakistan’s debt.