50% taxes waived for electric 4 wheelers
The government on Tuesday said that it would waive off 50 percent taxes on the production of 1800 CC hybrid and electric cars under the new proposed Electric Vehicle (EV) policy for 4 wheelers.
While briefing National Assembly Standing Committee on Industries and Production, Minister for Industries Hamad Azhar said that the government would give 50 percent tax exemption to manufacture 1800 vehicle cars. However, he added that the government would give 25 percent tax exemptions on electric cars over 1800 CC. Also, the government would waive off fee for registration and annual renewal of electric vehicles.
He said that the electric vehicle policy for 2/3 wheelers was already in place. Minister further added that around six companies had invested over US$470 million in setting up infrastructure for manufacturing hybrid and electric vehicles. He added that these companies would manufacture 418000 units annually.
He said that the government would announce the new five-year policy on electric vehicles for 4 wheelers in the next two weeks. The government would also waive off 50 percent duty on the import of 4 wheelers electric wheelers. The minister said that the government was in talks with different countries regarding the manufacturing of electric vehicles.
However, Azhar added that the government would try to maintain a balance while finalizing a policy. He said that the government did not want to use the existing auto players.
The committee members said that UK and EU give subsidies on electric vehicles. He said that the government should not give subsidies. However, it should reduce taxes on electric vehicles to promote them.
The inter-ministerial committee suggested a 1 percent duty for Non-Localized (non EV parts) and Localized parts. It also proposed to implement it for new as well as current automakers.
The committee also proposed waiving additional custom duty and additional sales tax for CKD and CBUs.
READ EV Policy: Sazgar set to produce electric 2 wheelers.
However, the EDB chairman had conveyed to the government that it should give a level playing field to all players, including existing and new entrants. He further said that the auto industry’s taxes were higher and proposed to slash them to attract investment. He insisted on the free market for the auto sector.
The committee members have divided over the tenure of electric vehicle policy. Some were of the view that it should be for five years. However, few members stressed introducing it for three years. But chairman EDB had said that government should give incentives for five years to roll out the electric vehicles on the roads.
The previous government had formulated a new policy to break the monopoly of current auto players. It had offered incentives for new entrants. So, the policy yielded results, and new players had started manufacturing cars. But cabinet members had come to know that auto players were still charging a premium on cars’ delivery. They did not follow even international standards in manufacturing cars.
The carmakers had hiked the prices of cars, several cars following the rupee’s devaluation against the dollar. Now, the rupee had stabilized, and people were looking towards a decrease in car prices. However, it was unlikely that they would reduce prices like past practices.
In Pakistan, there is a free market for the auto industry. But like all other sectors, it also has a monopoly in the market. There seems no regulator in place in the country. So, there is no one to keep a check on the market exploitation.
