Wednesday, October 5, 2022

A look at what is getting cheaper, costlier after budget 2021-22


The Pakistan Tehreek-Insaf-led federal government rolled out the budget 2021-22 on Friday.

Here’s a look at what will get cheaper and what will get costlier in the fiscal year 2021-22 that begins on July 1.


According to the budgetary documents, locally manufactured small cars below 850cc engine capacity have been exempted from federal excise duty and value-added tax (VAT) while the sales tax on these vehicles has also been reduced from 17 per cent to 12.5pc.

So, cars below 850cc will see a decrease in their prices after the change in the tax regime.

Electric cars

In order to encourage manufacturing and use of electric vehicles, various tax exemptions and concessions have been proposed, including tax exemption on import of Completely Knocked Down (CKD) kits for local manufacturing of electric vehicles, reduction in sales tax rate on locally manufactured electric vehicles from 17 per cent to one per cent, withdrawal of value addition tax on import of electric vehicles and CKD kits.

Additionally, Federal excise duty has also been withdrawn on four-wheelers electric vehicles.

Mobile services

The federal excise duty on mobile phone calls exceeding three minutes has been set at Rs1 per call, Rs0.1 on an SMS and Rs5 on one GB internet data.

However, hours after the presentation of the budget 2021-22, Federal Minister for Energy Hammad Azhar clarified Prime Minister Khan and the federal cabinet did not approve the FED levy on internet data usage. He added that it will not be included in the final draft of the Finance Bill (budget) that is placed before the parliament for approval.

withholding tax mobile services

Withholding tax on mobile phone services has been reduced to 10 per cent for the next financial year.


Withholding tax (WHT) on telecommunication services has been reduced from 12.5 per cent to 8 per cent.

Besides, the federal excise duty has been reduced by 1pc from 17pc to 16pc.

Fruit juices

The FDE is also being withdrawn on fruit juices, which was earlier imposed through Finance Act 2019.

FDE Withdraw on Fruit Juices

Air Travel and Banking

A number of withholding taxes (WHT) will be removed as part of income tax relief measures.

Those pertains to banking transactions, stock exchange transactions, banking, air-travel services, debit and credit card-based international transactions and mineral exploration.

income tax relief measures


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