Govt mulls tax relief to make cars up to 1,000cc affordable

Published June 19, 2021
The meeting also discussed various concessions that could be offered for electric vehicles (EV) to increase the number of such car imports. — AFP/File
The meeting also discussed various concessions that could be offered for electric vehicles (EV) to increase the number of such car imports. — AFP/File

ISLAMABAD: Tax relief for the auto sector is expected to be enhanced for cars up to 1,000cc in the Finance Bill 2021, with the aim of promoting affordable cars and localisation in the country.

In a meeting chaired by Federal Minister for Finance and Revenue Shaukat Tarin on Friday, Federal Minister for Industries and Production Makhdum Khusro Bakhtyar gave a detailed briefing on the new auto policy. The auto policy review and finalisation meeting was attended by Com­merce Adviser Abdul Razak Dawood and SAPM on Finance and Revenue Dr Waqar Masood.

The Finance Bill presented in the National Assembly proposed tax measures for vehicles up to 850cc under the Customs Revenue Measures and suggested exemption of Additional Customs Duty (ACD) and Regulatory Duties (RD). It further proposed reduction of Customs Duty (CD) from 30 per cent to 15pc. For Complete Built-Up Unit (CBU), it was proposed to reduce CD from 25pc to 10pc while for local manufacturing from 12.5pc to 5pc.

During the briefing, Mr Bakhtyar highlighted that the new auto policy will help provide affordable small cars from 850cc to 1,000cc.

Meanwhile, an official of the Ministry of Industries and Production (MoIP) said that there were limited cars below the range of 850cc and enhancing the engine capacity up to 1,000cc would be beneficial for the customers as well as the industry.

“Currently only a limited number of vehicles are below the 850cc category and if the range is enhanced to 1,000cc many auto companies already present in Pakistan would be able to launch small car models in the country,” the official said.

Mr Bakhtyar informed the meeting that the upcoming auto policy would help promote localisation in domestically-assembled cars, produce exportable surplus of two and three-wheelers auto parts and increase competition.

The meeting also discussed various concessions that could be offered for electric vehicles (EV) to increase the number of such car imports.

“Higher number of EVs in the local markets would encourage auto companies to invest in related infrastructure in Pakistan to facilitate EVs,” Mr Bakhtyar said.

The meeting also discussed the non- payment of ACDs by the auto-sector. Federal Board of Revenue (FBR) officials suggested the way forward to the finance minister regarding recovery of pending amount. It was decided that the matter needed to be resolved amicably for final settlement between the FBR and the auto industry.

Published in Dawn, June 19th, 2021

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Losing grip
Updated 29 Jan, 2023

Losing grip

The state and the government are responsible for providing Imran with the security he deserves as a former prime minister.
Telling silence
Updated 29 Jan, 2023

Telling silence

THE silence of the Sindh government over the recent exposé in this paper about Karachi’s water tanker mafia ...
Palestine escalation
29 Jan, 2023

Palestine escalation

THE fire of conflict once again threatens to envelop the land of Palestine, as the growing cycle of violence refuses...
IMF package
Updated 28 Jan, 2023

IMF package

While it is crucial to seek immediate IMF funding to shore up its reserves, the govt shouldn’t focus only on short-term relief.
Dar unpegged
28 Jan, 2023

Dar unpegged

IT is over. Nearly four months after Ishaq Dar descended on the cash-strapped economy with some decidedly outlandish...
Lurking hazards
28 Jan, 2023

Lurking hazards

OVERSIGHT of illegal industrial activity occurring within residential areas in the country is weak, especially in...