The government has imposed a withholding tax on new vehicles that are sold within three months of purchase. The decision was taken Wednesday on recommendations of the Economic Coordination Committee to meet the tax target set for the FBR.

The FBR will charge Rs50,000 in tax for 1000cc cars, Rs100,000 for 2000cc cars and Rs200,000 for vehicles more than 200cc. The decision is expected to curb car trading.

For local manufacture of cell phone, withholding tax has been capped at 4% and sales tax has been abolished. This is likely to reduce price of cars and phones across Pakistan.