Budget 2018-19: Government proposes reduction in customs duty on electric cars

April 27th, 2018 marked a historic day for Pakistan, as the government presented their sixth budget in the National Assembly. The 2018-19 fiscal year budget was announced by Finance Minister Dr. Miftah Ismail. It was an hour-long meeting, where Dr. Miftah’s proposed tax relaxations for many sectors such as agriculture and Information technology in his speech. Similarly, in the budget 2018-19 government has also proposed tax relaxation for automobile sector as well.

According to the budget 2018-19 and Finance Bill, below are the perks which have been proposed for automobile sector:

  • Exemption of 16% customs duty on charging stations for electric vehicles
  • Reduction of customs duty from 50% to 25% and exemption of 15% RD on electric vehicles
  • Customs duty on kits of electric vehicle reduced from 50% to 10%
  • Non-filers shall not be permitted to purchase new motor vehicles manufactured in Pakistan or new imported vehicle
  • Concessionary import of vintage or classic cars and jeeps at fix duty/taxes of US$ 5,000
  • Reduction of customs duty on import of firefighting vehicles from 30% to 10%

Read Also: The First Tesla in Pakistan has Landed and It’s a Beauty

It is pertinent to mention here that many media outlets are reporting that government has reduced customs duty on electric cars; however, this notion is false entirely. The government has only proposed the reduction in customs duty and other exemptions as well. The budget will be discussed in the parliament, and it is quite possible that these proposed exemptions are not to be given at all– in simple terms might get rejected by the parliament, but it is also possible that government actually give these exemptions or might change some of them. As mentioned above the budget will be discussed in the parliament and once it becomes final the parliament will pass it accordingly.

Following the news, we contacted an industry expert, and according to him, media outlets have created false hype in the industry by reporting that government has reduced customs duty and exempted regulatory duty on electric vehicles. These are only proposals, he explicitly said. Reduction of customs duty on kits of electric vehicles is also proposal made by the government, the expert told us.

Moreover, he further asserted that the proposal about vintage or classic cars is also not clear– meaning what is the definition of a vintage car according to the government, i.e., is 30 years old a vintage car or much older? After the budget is passed by the parliament in its final and complete form then we might get some clear picture, he added.

By looking at the above-mentioned steps, one thing is clear, and that is that the government is seriously concerned about the climate change and has proposed relaxation in duties on electric vehicles. It is to be noted here that on the global scale different countries and governments are moving toward electric vehicles in a bid to curtail the reliance on fossil fuel powered vehicles, which are one of the main sources of pollution. Furthermore, the governments are also trying to find renewable power generation sources to halt climate change and global warming.

Mr. Miftah in his budget speech also expressed his intention of curtailing reliance on fossil fuel and vehicles that run on fossil fuels.

Electric cars are now a global phenomenon; they are replacing fossil fuel powered cars rapidly. In Pakistan also, an individual has imported a Tesla car, which shows the popularity of electric vehicles.

Moving onward, if the proposal regarding classic or vintage cars is approved, then it would start another industry in Pakistan. Let’s wait and see how the events unfold.

Stay tuned to PakWheels.com blog, for latest updates.

My name is M. Ali Laghari and I love to read and write about Cars.

Notable Replies

  1. Very good step indeed for EV encouragement, but govt should give relaxation to hybrid vehicle as well because in our country infrastructure to use EV doesn't exist.

  2. @pakwheels

    you guys are again clueless,

    jump starting a patient after open heart surgery does not mean he will survive and start life as usual

    there is a Policy which actually translates the ' poison coated with sugar ' when the crust breaks away the poison starts to seep

    FINANCE BILL is actual Poison - the highlight announcements are sugar

    please obtain copy of Finance Bill and read carefully, the aftershocks will be felt when implementation starts, There is NO GOOD NEWS for Vehicle importers as such, rather BAD news for local car manufacturers booking & sales of NEW units will drop significantly

  3. He’s just old senile and bitter. Has nothing positive to add ever.

  4. Don't know what would be the real story, But the main thing right now that I feel strange about is people aren't paying heed to the fact that the General Consumption of electricity isn't already fulfilled & they're dreaming about electric cars! :stuck_out_tongue:
    The electric cars are a necessity of the economies, where Electricity is Abundantly available so they also use for their cars.

  5. @capsat looks mental to me . In other thread he is bragging about how he has friendship with hanif and how he got his license registered . Looks very cheap and small person to me .

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