The government has planned to provide tax relief for the car industry in the Finance Bill 2021 for promoting cars up to 1000 cc. This step is taken to enhance localization and economical cars in the country.
Makhdum Khusro Bakhtyar, the Federal Minister for Industries and Production, gave a detailed briefing on the new car policy in a meeting on 18th June chaired by Federal Minister for Finance and Revenue Shaukat Tarin. SAPM on Finance and Revenue Dr. Waqar Masood and Commerce Adviser Abdul Razak Dawood also attended the auto policy review and finalization meeting.
The Finance Bill brought in the National Assembly suggested exemption of RD (Regulatory Duties ) and ACD (Additional Customs Duty) and proposed tax measures under the Customs Revenue Measures for automobiles up to 850 cc. Furthermore, the bill proposed to decrease CD (Customs Duty) from 12.5% to 5% for local manufacturing while 25% to 10% for CBU (Complete Built-Up Unit). The bill also proposed to decrease the CD from 30% to 15%.
In the briefing, Mr. Bakhtyar informed about the help that the new auto policy would offer dealers to set affordable prices of 850 cc to 1000 cc small cars.
Meanwhile, an official of the MoIP (Ministry of Industries and Production) informed that there are a few automobiles below the range of 850cc, and promoting the engine capacity up to 1,000cc would be useful for both industry and buyers.
Mr. Bakhtyar further told the meeting that the new auto policy would aid to boost localization in domestically-assembled automobiles, increase competition, and manufacture exportable surplus of two and three-wheelers car spare parts.
Different concessions were also discussed in the meeting that could be provided for EVs (electric vehicles) to amplify the import of these kinds of cars.
Mr. Bakhtyar said, “Higher number of EVs in the local markets would encourage auto companies to invest in related infrastructure in Pakistan to facilitate EVs.”