Tax relief for the auto sector is expected to be enhanced for cars up to 1,000cc in the Finance Bill 2021, with the aim of promoting affordable cars and localisation in the country.
The Finance Bill presented in the National Assembly proposed tax measures for vehicles up to 850cc under the Customs Revenue Measures and suggested exemption of Additional Customs Duty (ACD) and Regulatory Duties (RD). It further proposed reduction of Customs Duty (CD) from 30 per cent to 15pc. For Complete Built-Up Unit (CBU), it was proposed to reduce CD from 25pc to 10pc while for local manufacturing from 12.5pc to 5pc.
During the briefing, Mr Bakhtyar highlighted that the new auto policy will help provide affordable small cars from 850cc to 1,000cc.
Meanwhile, an official of the Ministry of Industries and Production (MoIP) said that there were limited cars below the range of 850cc and enhancing the engine capacity up to 1,000cc would be beneficial for the customers as well as the industry.
“Currently only a limited number of vehicles are below the 850cc category and if the range is enhanced to 1,000cc many auto companies already present in Pakistan would be able to launch small car models in the country,” the official said.