Sunday, May 19, 2024

Govt. Announces Huge Tax Exemptions for Electric Cars in Pakistan

A cabinet meeting held today under the supervision of Prime Minister Imran Khan reviewed the overall political and economic strategy of Pakistan along with other development concerns, concluding with the approval of the country’s first ever electric vehicle (EV) scheme.

The cabinet also gave a go-ahead to the Economic Coordination Committee’s Mobile Manufacturing Policy and the other decisions.

Hammad Azhar, Minister of Production and Industry, tweeted the following highlights of the EV strategy for cars:

  • For locally produced EVs up to 50 kwh and light commercial vehicles up to 150 kwh, 1 percent sales tax is allocated.
  • Import duties for charging equipment capped at 1 per cent.
  • EVs are not applied by Federal Excise Duty (FED).
  • Duty-free import of EV manufacturing plants and equipment.
  • Removal on imports of EV cars of additional customs duty and accounting services and tax (AST).
  • For manufacturers: A tax of only 1% on imports of EV parts.
  • Registration & annual waiver of renewal fees in Islamabad for EVs.

Last week, during an ECC meeting in Islamabad chaired by the Minister for Finance and Revenue Dr. Abdul Hafeez Sheikh, the EV policy for two-wheel and three-wheel EVs was approved.

Regardless of whether the infrastructure will be adequate to meet the needs of Pakistan’s EV market however, with the approval of the EV policy, a huge paradigm shift within the local automotive industry appears imminent.

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