New automobile entrants’ incentives extended for five years

Islamabad: The government has extended incentives for car manufacturers in Pakistan under the new auto policy for another five years up to June 30, 2026.

The Federal Board of Revenue (FBR) has issued SRO in this regard to implement the incentives for car manufacturers in Pakistan.

The concessionary regime for new entrants expired in June this year. However, the government had extended incentives for new automobile entrants for another period of five years till June 2026.

In SRO, the Federal Board of Revenue (FBR) said that the concessionary custom duty for various models of new under ADP 2016-21 will continue for five years from the date of the manufacturing certificate of respective variant issued by the Engineering Development Board or up to 30th June 2026, whichever is earlier.

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Furthermore, it said that OEM will also pay interest to the customers on late delivery of cars.

The importer-cum-assembler or OEM shall pay KIBOR plus percent per annum to the customer against late delivery exceeding of initial booking on the whole of the deposited amount. Statement of reimbursement @KIBOR +3% against deliveries beyond 60 days be submitted to EDB bi-annually.

The previous government of PML-N had introduced a new auto policy 2016-21 in a bid to break the monopoly of Japanese-based car makers.

They had been involved in monopolistic practices for since long. The PML-N government had come to know that Japanese-based car manufacturers were not only charging ‘own money but were also using obsolete technology.

In a bid to bring competition to the auto market, the PML-N government had approved a new auto policy that offered several incentives for new entrants in the auto market.

PTI government had also extended these incentives announced for new entrants to break the monopoly of Japanese-based automakers.

However, it is also alarming that new entrants were also charging ‘own money from the customers.

The cabinet had tasked the industries minister to probe the issue. The cabinet members had taken up the matter in cabinet and informed Prime Minister Imran Khan that carmakers were still charging ‘own money.

The parliamentary panel on Industries had also raised the issue of late delivery of cars by carmakers and charging  ‘own money.