Pakistan’s upcoming auto policy will be finalised after consultations with the International Monetary Fund (IMF), sources said.
Sources said the IMF has previously opposed reducing the sales tax on 800cc vehicles to 12.5%, and discussions with the lender will also be held regarding tax incentives proposed under the new policy.
Prime Minister Shehbaz Sharif has directed authorities to make the auto policy more investor-friendly, with the aim of increasing investment and creating employment opportunities in the country, sources added.
The proposed policy is expected to promote electric vehicles (EVs), plug-in hybrid vehicles, and hybrid vehicles. It will also include measures to introduce international safety standards for new vehicles.
Sources said the policy may impose a carbon tax on locally manufactured vehicle engines, while ensuring compliance with 62 vehicle safety standards in line with United Nations regulations.
Consultations on the policy will be held with the Federal Board of Revenue (FBR), the Ministry of Commerce, and the Ministry of Law. The draft policy is expected to be presented to the Economic Coordination Committee (ECC) of the federal cabinet soon, sources said.
The launch of the new auto policy is likely in August.
