On November 22, 2022, Regulatory Duty (RD) on Electric Vehicles (EVs) was expiration under SRO1571(I)/2022. FBR had increased the RD to 100% from 0%. The notification by FBR read that the hike observed in the regulatory duty imposed on electric vehicles “shall take effect on and from the 22nd day of August 2022 till the 21st day of November 2022.” And the government decided not to expand the duty further. And because of that, the biggest EV importer in Pakistan, Audi, decreased its prices to Rs. 2 crores.
RD to Be “Reimposed”
However, days after, the news started to circulate that the government would reimpose the RD in the coming days. As per sources, the summary to reimpose RD on EV vehicles has been moved by Finance Division as decided in an ECC meeting earlier this week. “The notification is to be issued by next week,” the sources further claimed. And if it is true, it clearly means that the RD was removed to benefit the few in the elite because there is no other explanation for it.
According to our sources, the government authorities have cleared around ten luxury EVs in the last week or so. A Twitter handle named Economy Pakistan also claimed that the government opened LCs of 12 e-tron Audi cars for someone influential (Costing Crores). Meanwhile, industrialists & exporters are waiting for LCs for their machinery.
The government opened LCs of 12 E-Tron Audi cars for someone influential (Costing Crores).
On the other hand, industrialists & exporters are waiting for LCs for their machinery.
International sellers are struggling to get money from Pakistan 🇵🇰.
— Economy of Pakistan (@Pakistanomy) November 25, 2022
Expert Opinion
Sharing his thoughts on the situation, economist Ali Khizer tweeted that RD on EVs is removed. “The price of e-tron is reduced by Rs19.5 million (almost Rs 2 crore) on its top variant. People having knowledge (or architects) of this footnote were already planning to import expensive EVs,” he said.
Now RD on EVs is removed. The price of e-tron is reduced by Rs19.5 million (almost Rs 2 crore) on its top variant.
People having knowledge (or architects) of this footnote were already planning of importing expensive EVs.
2/ pic.twitter.com/1nN0PHPEKm— Ali khizar (@AliKhizar) December 1, 2022
He further mentioned that some have already parked their cars in Dubai to get instant delivery. Others are expediting the booking. Experts expect to import 300-400 EVs, including e-tron, Mercedes EQS, and some Chinese, in December 2022 and January 2023.
“Once the import numbers are published, RD on EVs is expected to be re-imposed. If that happens, some will make a hefty capital gain of Rs10-20 million,” he said.
Some have already parked the cars in Dubai to get instant delivery. Others are expediting the booking. Experts are expecting import of 300-400 EVs including e-tron, Mercedes EQS and some Chinese in Dec22 and Jan23.
3/— Ali khizar (@AliKhizar) December 1, 2022
Once the import numbers would be published, it is expected that RD on EVs to be re-imposed. If that to happen, some will make hefty capital gain of Rs10-20 million.
4/— Ali khizar (@AliKhizar) December 1, 2022
Who is Getting Benefit?
Discussing the people who could be directly benefited, Khizer said: “In meetings, Standing committee members bashed FBR and all on banning EVs, and inserted these footnotes in Aug-22. Some say parliamentarians themselves have booked these EVs. And others must also be in the super elite club.”
Who could be these people?
In meetings, Standing committee members bashed FBR and all on banning EVs, and inserted these footnotes in Aug-22. Some say parliamentarians themselves have booked these EVs. And others must also be in super elite club.
5/— Ali khizar (@AliKhizar) December 1, 2022
The economist concluded: “At one end, SBP imposes strict restrictions on essential imports. People are losing jobs. The economy is tanking. On the other hand, powerful lobbies are letting expensive cars come for themselves; what kind of belt-tightening is this?”
How shameful the whole episode is.
At one end, SBP is imposing strict restriction on essential imports. People are losing jobs. The economy is tanking. On the other hand, powerful lobbies are letting expensive cars to come for themselves
what kind of belt tightening is this?
N/— Ali khizar (@AliKhizar) December 1, 2022
A journalist hinted at the worth of these EVs in Euros and shared the data from PSW Portal. “PSW portal doesn’t show dates, but 848,720 Euros (Assessed value) worth of Electric Vehicles (PCT Code: 8703.8090) were cleared in the last 90 days. Their custom duties were charged under two SROS. Eleven of them are Audi Etron 50s, and 5 are Audi Etron GTs.”
PSW portal doesn't show dates but 848,720 Euros (Assessed value) worth of Electric Vehicles (PCT Code: 8703.8090) were cleared in last 90 days.
Their custom duties were charged under two SROS.
11 of them are Audi Etron 50s and 5 are Audi Etron GTs. https://t.co/er5eGr0PUo— ּ (@MainKehRahaHoon) November 26, 2022
Meanwhile, the sources in Audi Pakistan have told us that the “zero” e-tron has been cleared after November 21. As per the sources, it is not possible to import/clear any car within these days, and the company already has several cars parked at their dealerships.
What is your take on this whole scenario? Please share your thoughts in the comments section.
Or how to give a blow to Pakistan economy …