Pakistan’s new auto policy is nearing completion, with the government planning changes to vehicle imports, localisation, tariffs, electric vehicles and safety standards.
Prime Minister’s Adviser on Industries and Production Haroon Akhtar Khan briefed the Senate Standing Committee on Industries and Production on Wednesday about the proposed policy.
Cheaper cars, protected factories: new auto policy Pakistan
Akhtar said the government wants to reduce vehicle costs for consumers while protecting local manufacturing. He cautioned that excessive tariff cuts could hurt domestic production and increase imports of completely built-up (CBU) vehicles.
The adviser said the government wants to discourage CBU imports and strengthen local manufacturing. The policy also includes measures to increase localisation and promote electric vehicles.
The road to approval
Akhtar said the government has completed work on the policy through a committee headed by the Law Minister. The draft will be shared with the International Monetary Fund, after which the Law Minister will brief Prime Minister Shehbaz Sharif.
The policy is expected to be presented to the federal cabinet for approval and then shared with the relevant parliamentary standing committees. The government has also proposed duty drawback incentives for exports of locally manufactured vehicles. Auto-parts industry representatives said high taxes remain a major hurdle to increasing vehicle exports.
Used car imports
The Senate committee also discussed used vehicle imports and changes to the personal baggage and gift schemes. Akhtar said the personal baggage scheme had been abolished because of misuse, while the gift scheme would continue.
Under the proposed arrangement, a vehicle imported through the gift scheme would have to remain registered in the recipient’s name for one year and could not be transferred during that period. Officials said one vehicle could be gifted once every three years, and no additional tax had been imposed on vehicles imported under the gift scheme.
Representatives of the Pakistan Association of Automotive Parts and Accessories Manufacturers warned that large-scale imports of older used vehicles could hurt local manufacturers and create problems for the domestic auto industry.
FAQs
What does the new auto policy cover?
Vehicle imports, localisation, tariffs, electric vehicles and safety standards, with duty drawback incentives for exports of locally made vehicles.
What happens next?
The draft goes to the IMF, then the Law Minister briefs the prime minister, and the policy heads to the federal cabinet for approval.
What changes for used car imports?
The personal baggage scheme has been abolished over misuse; the gift scheme continues with a one-year registration lock and a limit of one gifted vehicle every three years.
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Originally reported by propakistani.pk.
