Overview
The government has demolished the plan of automakers to increase car prices. The government has interrupted and ask the automakers to justify the jack-up prices of cars. Earlier government has held up the price hike of Changan Motors and also warn the automakers to never increase the car prices. In the Auto Policy (2021-2026) government provide tax relief to the automakers just to reduce the car prices and make car purchases easy for customers. The sale of local cars in Pakistan declining due to the high car prices in the last few years. To kept the matter in view government has reduced the percentage of taxes. After the announcement of tax reduction automakers reduced car prices but again they are planning to revise car prices.
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Govt Warning to Automakers
The government has asked the automakers to mention the reason for jack-up car prices and warn them to enforce the law of profiteering against them. The government has sent the message to automakers officially. The Ministry of Industries and Production (MoIP) has sent a letter to Engineering Development Board (EDB) regarding the issue. In the letter Ministry mentioned:
“The government has provided relief in taxes to all locally assembled car makers just to reduce the prices of cars and make them affordable for the public. After the concession in taxes, automakers had reduced the car prices according to the concession of tax. Only in few weeks without any increase in taxes do they intend to increase the car prices that are not acceptable.”
The notice clearly shows the intentions of the government and threatens the automakers to enforce the law of profiteering under the Act, 1977. Without any increase in cost, the government has clearly mentioned to automakers to not increase car prices.
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Conclusion
This is the first time in Pakistan’s automobile history government has reduced the taxes for all local car manufacturers. This is the great intention of the government to take action against price hikes for no reason. Last year automakers had increased the prices and the government never intervened because the taxes were increased by the government. Ministry has mentioned the reason the tax reduction is just to make the cars affordable for the public in which the price hike is not acceptable. The notice of Ministry is hope the prices of cars remain same and not to increase.
