Locally manufactured two-, three electric wheelers proposed 1pc sales tax for seven years

ISLAMABAD: All two and three wheelers manufactured under Electric Vehicle Policy will sold at less than one percent sales tax for next seven years to bring the purchase price of EVs down, according to the policy.

However, all two and three-wheeler EV’s imported shall be sold at one percent sales tax for the next five years.

EVs will be exempted from registration fees and annual token tax to encourage prospective buyers and the FBR shall evolve a policy to evolve tax incentives for prospective buyers of the two-wheeler and three wheelers.

All existing incentives of the Auto Development Policy 2016-2021 will remain intact, according to EV Policy 2019.

The policy said that Pakistan had a large market of two and three wheelers. More than twenty million such vehicles are already on roads in Pakistan.

Their local production has reached indigenization of more than 90 percent. Therefore, the need is to incentivize the already available manufacturing expertise for converting to e-bikes and e-rickshaws.

Moreover, a new category of low speed electric vehicles have emerged that is added into this category.

The policy said that EV specific parts and components, not being manufactured locally compliant to UNECE 1958 Agreement ‘WP.29’ standards as well as equivalent international standard applied by the United States, European Union and other major EV manufacturers, will be allowed import at one percent customs duty and one percent sales tax for the next two years.

Registration number plates of EVs will have a distinct color/design to create EV specific zones in high density areas. The registration number plates will be different from other typical vehicles to distinguish between two, three and low speed four wheel electric vehicles and other vehicles segments.

A special provision for import of swappable battery-based three wheelers is being introduced to help both introduction of such vehicles and charging infrastructure.

Those manufacturers or consortia who demonstrate setup of manufacturing of these units and battery swapping infrastructure of running of these vehicles will be allowed to import a cumulative number of 20,000 completely built units (CBU) along with the charging infrastructure at one percent customs duty and can sell these units at one percent sales tax.

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