LAHORE – The increase in Federal Excise Duty (FED) by 150 percent to 2.5 percent on items already subjected to one percent duty would further surge automobile prices in Pakistan. The special excise duty has been levied to generate additional revenue in three months. This move will further burden buyers of locally manufactured automobiles as manufacturers will be forced to raise prices.
Indus Motor Company (IMC) has announced that, following the government move; price of Corolla 1300cc (XLI/GLI) will increase by Rs 20,000, while price of Corolla 1800cc (Altis) will swell by Rs 25,000. Similarly, cost of Hilux 4×2 and Hilux 4×4 will surge by Rs 20,000 and Rs 30,000 respectively. The cost of Cuore will increase by Rs 10,000.
IMC Director Marketing Raza Ansari said, “This sudden issuance of the Ordinance will trigger further problems for customers and manufacturers. The local auto industry, a key driver of industrial development in Pakistan, is already under pressure to increase prices of cars due to inflation, depreciation of the Pak Rupee and rising raw material costs. The increase in FED will hurt the industry – dwindling sales which in turn would increase the vacant capacity at OEMs, leading to job cuts.”
While the automobile industry is still trying to recover from the shock, following the government’s move to increase age limit of imported cars from three to five years; the new levy is expected to further hurt the industry, providing direct employment to 200,000 workers and livelihood to over one million people.
