Govt to enhance incentives from 850 to 1000 cc cars
ISLAMABAD: The government is likely to enhance tax reliefs for the auto sector from 850 cc cars to 1000 cc cars in Pakistan in the finance bills 2021-22, in an order to promote affordable cars and their localization in the country.
The government has already proposed incentives for 850 cc cars and now agreed to enhance to 1000 cc cars in Pakistan in budget 2021-22.
Federal Minister for Industries and Production Makhdum Khusro Bakhtyar, briefed the meeting here Friday, held to review and finalize the new Auto-Policy.
The Federal Minister for Finance and Revenue, Shaukat Tarin chaired a meeting. The Adviser to PM on Commerce Abdul Razak Dawood and SAPM on Finance and Revenue Dr. Waqar Masood also attended a meeting.
The finance bills presented to the national assembly have proposed tax measures for vehicles up to 850 ccs, under the Customs Revenue Measures. It suggested exemption of Additional Customs Duty (ACD) and Regulatory Duties (RD) and reduction of customs duty from 30 percent to 15 percent.
While, for the CBU (Complete Built-Up Unit) the customs duty has been proposed to be reduced from 25 percent to 10 percent, and for local manufacturing from 12.5 percent to 5 percent.
Read More: 850 CC cars prices down by Rs 200,000 in budget
However, the briefing by the Minister for Industries and Production highlighted that the new auto policy will help provide affordable small cars from 850 ccs to 1000 cc.
Meanwhile, an official of the ministry of industries said that there were limited cars below the range of 850 ccs, and enhancing the engine capacity up to 1000 cc would be beneficial for the customers as well as the industry.
Officials said there were a limited number of vehicles are present below the 850 cc category at present. With the initiative to enhance tax incentives to 1000 cc many auto companies in Pakistan would be able to launch their small car models in the country.
The minister of industries and production informed the meeting that the upcoming auto policy would help promote localization in domestically assembled cars, produce an exportable surplus of auto parts of 2-3 wheelers, and increase the competition.
Read More: Car for sales in Pakistan down by 17%
During the meeting, the two sides also discussed various concessions to offer to electric vehicles (EV) to increase the number of vehicles imported.
Industries minister said the higher number of EVs in the local markets would encourage the auto companies to invest in the related infrastructure in Pakistan to facilitate the EVs.
The meeting also discussed the non-payment of ACDs by the auto sector and the officials of FBR suggested the way forward to the finance minister regarding recovery of the pending amount.
They decided to resolve the issue amicably for a final settlement between the FBR and the auto industry.
