Tax relief for affordable vehicles

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IN what could be an important initiative to encourage manufacturing of affordable vehicles including bikes, small vehicles, tractors etc in the country, the government has now approved a number of tax and duty reliefs on the existing and new entrants under the Auto Industry Development and Export Policy 2021-26.

Besides, the five-year policy is also aimed at improving localization, ensuring consumers’ protection, promotion of new technologies i.e. electric and hybrid vehicles and targeting export markets.

The aspect of encouraging the companies for local manufacturing of vehicles has always been ignored in the past.

The previous auto policy succeeded in bringing new entrants to the Pakistani market but still many auto parts are imported from abroad for their assembly in Pakistan.

We understand that the new auto policy envisages all the incentives in the form of taxes and duties reduction to promote complete localization of vehicles but it must be ensured that the incentives given to the auto industry reach the people in the form of reduction in the prices of vehicles.

In the developed world, one may see the boom of electric vehicles and we should also keep pace with the world to reap its benefits.

Future belongs to the electric vehicles as the countries are pursuing the course of cutting emissions. Hence, promoting electric vehicles will not only cut our fuel import bill but also go a long way in checking the issue of pollution and smog.

Most importantly, there should not be any compromise on the quality of locally produced vehicles either electric or others. Up till now, the cars that used to be provided to Pakistani customers lacked basic safety features such as airbags.

A mechanism should be put in place ensuring that the vehicles manufactured locally meet the international standards and have all the safety measures in them.

It is only then we will also be able to achieve one day the target of exporting cars. There is no doubt that this auto sector alone can immensely contribute to the economy and job creation, and the government’s measures aimed at facilitating it are highly welcomed.

 

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