ISLAMABAD: The government has announced to cut customs duty on import of electric cars to encourage the use of such clean vehicles in the country.
“To promote environment-friendly electric vehicles, an enabling fiscal environment for related infrastructure is necessitated. It is, therefore, proposed that 16% customs duty on charging stations for electric vehicles may be withdrawn,” announced Finance Minister Miftah Ismail during the budget speech for fiscal year 2018-19.
“Customs duty on the import of electric cars is proposed to be reduced from 50% to 25%, in addition to exemption from 15% regulatory duty. Import of CKD (completely knocked down) kits for the assembly of electric cars in the country is proposed at 10%,” he said.
These measures are in addition to the incentives already announced in the Auto Development Policy for 2016-21 that has been widely praised.
Kia, Hyundai and SsangYong Motor Company of South Korea, Germany’s Volkswagen, France’s Renault and Japan’s Nissan have announced plans and formed partnerships to enter Pakistan’s auto market, most probably in the next one year.
Local importers like United Motors and Sazgar, the manufacturers of two-wheel and three-wheel vehicles, have also made plans to enter the country’s lucrative four-wheel industry.
Market talk suggests that a new entrant is aiming to introduce electric cars and the government’s budget measures are also expected to encourage existing manufacturers to enter this arena.
“Electric cars are the future of the auto industry,” remarked Wasif Safdar, who imports used cars for resale.
He said a few used Nissan Leaf electric cars had already been brought to the Karachi port, but because of high duty, their importers defaulted on payments and the cars were later auctioned. “If electric cars have 0cc engine capacity, then how could customs duty be imposed on them,” he asked.
