In annual budget 2021-22, the government has removed Federal Excise Duty (FED) on locally assembled cars under 850cc. It was 2.5% earlier.
While speaking at National Assembly Federal Finance Minister Shaukat Tareen said that sales tax on these cars also has been reduced to 12.5% from 17%, meaning the reduction of 4.5%.
It means the prices of Suzuki Alto, Prince Pearl, and United Bravo will be reduced up to Rs1,13,000.
The minister further said that the government wants to support electric vehicles in Pakistan. “That is why we are offering a lot of tax relaxations to them,” Tarin said.
Auto Policy:
It is pertinent to mention that on June 9, government spokesperson and Special Assistant to PM on Political Communication, Dr. Shahbaz Gill had said that Prime Minister Imran Khan will approve the new Auto Policy. In a tweet, Gill said there are three main goals of new policy:
- To reduce car prices so middle class of the country can also buy them
- To increase the local assembly/production of the cars
- To enhance the export of cars
“Khusro Bakhtiar, Hammad Azhar and their teams must be congratulated for their efforts,” Gill said.
New Auto Policy For All Stakeholders:
Earlier, Federal Minister for Finance Shaukat Tarin stated that the new auto policy will benefit all stakeholders. He reviewed the policy with Federal Minister for Industries and Production Khusro Bakhtiar during a meeting.
The minister presented a comprehensive presentation on the proposed policy, which will have significant impact on localization of parts, increasing productivity, revenue collection, addressing the demand-supply gap and possibility of producing exportable surplus.
Both ministers also discussed the role of new car manufacturers in the local auto industry. While reviewing the policy, Tarin asserted that all three involved stakeholders, i.e., customer, manufacturer and the government should remain beneficial from this.
It is pertinent to mention that Pakistan’s first Automotive Development Policy (2016-2021) will expire at the end of this month. The government has held numerous meetings with car manufacturers and other stakeholders over the new auto policy. As per reports, the government is especially focusing on electric vehicles and their entrance in Pakistan.
A great news indeed, what do you think of it? What are your expectations from this new policy? Share your thoughts in comments section.
