Electric cars in Pakistan will boom in future as the GST is nearly zero on locally manufactured electric cars.
The general sales tax on locally manufactured electric cars — those with batteries holding less than 50-kilowatt hours (kWh) of power — has dropped from 17 percent to nearly zero, said Asim Ayaz, general manager of the government’s Engineering Development Board (EDB).
At the same time, the customs duty on imported electric car parts — such as batteries, controllers and inverters — is down to 1 percent.
The duty on importing fully built electric cars also has fallen from 25 percent to 10 percent for one year, Ayaz told the Thomson Reuters Foundation.
Officials say the tax relief is a big step toward implementing Pakistan’s National Electric Vehicle Policy, originally passed by the cabinet in November 2019.
It aims to put half a million electric motorcycles and rickshaws and 100,000 electric cars, vans and small trucks into the transportation system by 2025.
“Definitely the tax exemptions make the price point (on electric vehicles) competitive,” said Malik Amin Aslam, the special assistant to the prime minister on climate change.
“It makes it extremely attractive for the customer to go electric.”
Aslam said if about a third of new cars sold run on electricity by 2030, as envisioned, Pakistan could see a big drop in climate-changing emissions and pollution.
Electric vehicles currently produce 65 percent fewer planet-warming gases than those running on fossil fuels, he said.