Islamabad: The Pakistan government has announced new measures encouraging the use of electric vehicles (EVs) as part of the country’s ambitious shift towards clean energy and emission-free future.
The federal cabinet has approved huge tax exemptions on four-wheeler electric vehicles, Federal Minister for Industries and Production Hammad Azhar confirmed. The policy for two-wheeler and three-wheeler EVs was also approved earlier.
One of the major incentives to encourage adoption of EVs is one per cent sales tax for locally developed EVs up to 50 kwh and light commercial vehicles (LCVs) up to 150 kwh. The cabinet also capped the duty on import of charging equipment at one per cent. The government has removed additional customs duty (ACD) and added taxes on import of electric vehicles and exempted federal excise duty (FED). The import of plant and machinery for the manufacturing of these vehicles would also be duty-free.
There will be only one per cent tax on the import of EV parts for manufacturers in an attempt to boost local production. Meanwhile, the government has also waived registration and annual renewal fee for EVs in Islamabad to promote the adoption of eco-friendly cars in the capital city.
30% electric vehicles by 2030
Pakistan’s ministry of climate change has earlier announced to switch over to 30 per cent electric vehicles by 2030 under National Electric Vehicles Policy. Climate Change Advisor Malik Amin Aslam has said that electric vehicles will “revolutionise” the transportation industry in Pakistan and reduce the import bill by $2 billion every year. The benefits for the common man are immense, as EVs will help save them fuel and maintenance costs, he said.
Electric vehicles are considered one of the crucial pillars of the clean energy revolution as the EVs emit less greenhouse gasses into the atmosphere and help address global climate change challenges. Recently, Pakistan also announced to launch battery-powered electric buses in Islamabad in collaboration with a European electric bus company in a bid to shift the public transport towards cleaner energy.
Highlights of Pakistan’s EV policy:
• Federal excise duty (FED) removed on EVs
• Additional customs duty and additional sales tax slashed on imports of electronic vehicles
• Only 1% tax on imports car parts for manufacturers
• Registration and annual renewal of electric cars free for residents of Islamabad capital territory.
• Sales tax reduced to 1% for electric cars between 50kwh and 150kwh that are made in Pakistan
• Import of EV charging equipment capped at 1%
• Duty free import plant and machinery for manufacturing of EVs.