Govt Announces Massive Tax Exemptions for Electric Vehicles

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The federal government has approved and announced massive tax exemptions for 4-wheeler electric vehicles in Pakistan. Minister for Industries and Production, Hammad Azhar, made the announcement in a tweet.

The minister shared the salient features of the EV policy for 4-wheelers, approved by federal cabinet today, which are:

Features of Policy for Electric Vehicles: 

  • Removal of Additional Customs Duty and AST on imports of EV cars
  • Only 1% tax on import of EV parts for local manufacturers
  • No Registration and annual renewal fee for EVs in Islamabad
  • 1% sales tax for local made EVs up to 50kwh and light commercial vehicles up to 150 kwh.
  • Only 1% Duty on import of charging equipment
  • No Federal Excise Duty (FED) on Electric Vehicles
  • Duty free import of plant and machinery for manufacturing of EVs.

Last week, federal government finally approved the EV Policy for 4-Wheelers. The policy was approved during a meeting of the Economic Coordination Committee (ECC). It is pertinent to mention that the government has already approved the EV policy for 2-3 Wheelers and commercial vehicles.

During the meeting, the government said that this policy took time to be finalized due to inherent complexities. Furthermore, the long consultative process with existing original equipment manufacturers (OEMs) was also the reason behind the delay.

Meanwhile, in October this year,  Federal Minister for Science and Technology Fawad Chaudhry had said that the government will install electric vehicle charging stations on all motorways. He was speaking at the ceremony to sign a MoU between science ministry and British Company, EGV Limited. Both sides have signed the MoU to build electric buses in the country.

“In next two to three years, the entire motorway network will shift to EV charging,” the federal minister said.

Electric Vehicle Charging Stations and Public Transport: 

Talking to media, he further said that EGV is Europe’s largest bus manufacturing company, and will make electric buses in Pakistan. “This is the second agreement of current government with a foreign company to develop electric buses,” he said.

In the first phase, the buses will run in three major cities of the country, i.e., Islamabad, Karachi and Lahore.

Furthermore, the government has announced to shift 40% of public buses to electric within the next ten years.

Almost three months ago, Pakistan State Oil (PSO) installed Islamabad’s first EV charging station. At the time of inauguration, the Federal Minister for Power Division Omar Ayub Khan told media that the government is planning to install 24 electric vehicle charging stations across the country. The minister said the government is taking all steps to tackle the menace of air pollution. 


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