The federal cabinet has approved a new auto policy which proposes tax exemption on vehicles up to 850 cc.
The new five-year 26-2021 auto policy was introduced in the federal cabinet which includes tax exemption on vehicles up to 850 cc, abolition of additional customs duty, abolition of excise duty on locally manufactured vehicles and car manufacturers till 2026. Suggestions include a 10% export target.
According to sources, the new auto policy also proposes to abolish holding tax on small vehicles. It is also proposed to apply tax exemption on small imported vehicles.
According to sources, tax exemption on imported vehicles will be reviewed every year. Under the new auto policy, it is proposed to give 10% export target to car manufacturers by 2026.
The target for car manufacturers is 2% next year, 4% in 2024 and 7% in 2025. Measures have also been proposed to increase exports of automobiles and spare parts.
It is also proposed to provide tax incentives for the export of vehicles and spare parts and to make the Ministry of Commerce responsible for negotiations with foreign countries.