ISLAMABAD-The government on Monday decided to consult all stakeholders for devising an Electric Vehicle Policy that would attract investment in the auto sector of Pakistan.
A high level meeting chaired by Adviser to Prime Minister for Commerce and Investment Abdul Razak Dawood has discussed the Electric Vehicle Policy. Chairing the meeting, adviser advocated a fair and transparent policy which is beneficial for consumers and investors alike. He supported the idea that existing policies in the automobile sector have to be allowed to function as well because continuation of policy is important for building the confidence of investors. Adviser on Industries and Production said that the policy is the need of the hour, particularly because of its impact on environment, but its success would depend on promoting local production and assembly, while ensuring the safety standards. Dawood added that a comprehensive EV Policy will be designed in consultation with stakeholders, as a part of this government’s existing effort to attract investment in the auto sector of Pakistan.
Federal Minister for Science and Technology and Advisers to Prime Minister on Climate Change and Institutional Reforms and Austerity also attended the meeting. The purpose of the meeting was to discuss and devise an Electric Vehicle Policy.
The Economic Coordination Committee (ECC) of the Cabinet in its meeting held on March 26 had discussed the Electric Vehicle Policy. The ECC had formed an inter-ministerial committee, to firm up proposals in a month’s time on incentive package for National Electric Vehicle policy (NEVP) comprising Minister Planning & Development, Minister Science and technology, SA PM on Austerity and Institutional Reforms, Deputy Chairman Planning Commission, SA PM on Commerce (Chairman), SA PM on Petroleum, Secretaries Industry and Climate Change.
The Ministry of Climate Change in its summary argued that the proposed package in the NEVP aims to introduce the EVs in the country, and make their prices affordable by focusing on local manufacturing. The incentives package among others, proposes nominal import duty at one percent on the import of parts and components of various categories of EVs 2-3 wheelers, various categories of cars, buses and trucks. It further recommends nominal sales tax at one per cent on the sale of all EV categories to make these affordable for the buyers/general public.
The capital cost of the EVs is still high due to high battery costs, and as such without the proposed incentive structure it will be difficult to introduce EVs in the country. ECC acknowledged the role and efforts made by Ministry of Climate Change on preparing Incentive proposals for National Electric Vehicle Policy. However, the Federal Board of Revenue (FBR) argues that import duties for all categories of vehicles should be at 10 per cent rather than the NEVP proposed one per cent.
Their view is that a nominal customs duty will impact potential revenue due to reduction in duties, and the GST will be more than offset by the benefits of EV introduction in a timely manner, local production and export potential.