Massive tax relief announced in 2021-22 budget to encourage use of environmentally-friendly vehicles

The Federal Minister for Finance, Shaukat Tarin, announced tax relief for the sale and purchase of vehicles with engine displacements of up to 850cc.

Automotive industry analysts, enthusiasts, and casual car buyers are happy with Pakistan’s 2021-22 budget. According to reports, the government has announced significant relief in duties and taxes on the sales and purchases of smaller vehicles.

Experts believe that the current budget is evident that the government’s primary focus is on encouraging the buying, selling, and manufacturing of more environmentally-friendly vehicles in the near future.

Details of the Significant Tax and Duty Relief

The Federal Minister for Finance, Shaukat Tarin, announced tax relief for the sale and purchase of vehicles with engine displacements of up to 850cc. Reports state that the government has also offered relief in terms of taxes on the imports of the CKD units of Electric Vehicles (EVs).

The Finance Minister further stated:

The sales tax on locally assembled EVs has been reduced from 17 percent to one percent. Furthermore, the Value Added Tax on the imports of EVs and their CKD kits and the Federal Excise Duty (FED) on four-wheeled EVs have been abolished.

Will The Relief Boost EV Demand?

The actions and decisions of the government confirm that the government wants Pakistanis to move towards environmentally-friendly vehicles.

However, it is pertinent to mention that the public is still uncertain about the normalization of EVs in Pakistan. The uncertainty stems from implementation factors like lack of charging infrastructure, the inherently high costs of manufacturing that lead to high prices, and maintenance-related issues.

Experts believe that the success of EVs in Pakistan can only be ensured if the government steps up to execute the plan properly. Crucial factors that need to be considered for this possibility include enacting a policy to aid the speedy development of the charging infrastructure and taking measures to ensure low manufacturing costs for EVs.

What are your thoughts on this? Please share with us in the comment section below.

  • I support PTI but this is a mere show. Nothing is done for the poor or middle class in this budget but a drama.

    The ‘HUGE’ reduction in car prices is something around 75 thousand to 1 lac on a car that is priced at 27 to 30 lac. What a relief for a poor or middle class man!!!


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