New Auopolicy of Pakistan gives major importance to reducing car prices of small capacity engine cars up to 1000 CC.
In Pakistan, as compared to other neighboring countries car prices are relatively high.
There are certain reasons for such huge car prices. One of them is importing the components used in making cars or assembling them in Pakistan. As this trade happens in dollars and the dollar rate is ever-increasing so historically car prices have always been increasing despite dollar prices reducing in current months.
2nd major reason for such high prices of cars in Pakistan is taxation on this sector.
In this budget, Govt has reduced taxes as below.
Sales tax cars up to 850 Cc Cars has been revised from 16% to 12.5% and now in post-budget, it has been discussed to give this tax relief up to 1000 CC Cars.
2ndly Federal Excise Duty which was 2.5% now it has been reduced to Zero.
3rdly the value-added tax has also been reduced.
On cars which are completely built units imported from abroad, Excide duty is reduced from 25% to 10%.
The above measures of part of the new auto policy of the country.
Following are the major points of the new auto policy of Pakistan.
1-Cheaper Small Capacity Engine Cars
The major objective of the new auto policy of Pakistan is just to reduce the ever-increasing prices of cars.
A certain measure is being considered to be taken to implement car price reduction for small capacity engines up to 1000 CC Cars.
These measures include reducing the tax burden on local car manufacturing which is levied on different stages like imported components, value-added taxes and sales taxes. Increasing the manufacturing of cars in Pakistan will make small-capacity engine cars cheaper as well.
2-Localization of Car Manufacturing
Govt new auto policy emphasizes on localization of making cars in Pakistan because it would more helpful to increase employment in the country, companies to make a profit and hence produce more taxes and revenue for the country and availability of different car options to the ultimate consumers.
localization of car manufacturing will bring healthy competition as well. So Pakistan has issued almost 16 manufacturing of cars companies licenses so that they could manufacture cars in Pakistan for all of the above objectives.
3-Bringing 2,3 Wheelers vehicles to Export Level
The new auto policy aims to bring local manufacturing of two and three-wheelers vehicles to manufacturing levels including motorcycles and rickshaws and three-wheeler cars.
This would be helpful in boosting countries’ exports and increasing employment for the youth of the country.
4-Producing Local Car competition
The new auto policy also aims to bring healthy competition among locally manufactures cars which will be helpful to give more options of cars to people as well reduce car prices and improve the quality of the cars.
5-Promotion of Electrical Vehicles
Govt is promoting electric cars in the new auto policy 2021 as these are more environmentally friendly cars. In budget 2021-22 the sales tax on electric vehicles has been reduced from 16% to just 1%.
Govt is making efforts to engage the automobile sector in building infrastructure like power stations of roads to make it possible for people to buy electric cars which would be available at cheaper rates as compared to the petrol cars.
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