ISLAMABAD: While the government works on finalising the Auto Industry Development and Export Policy (AIDEP) 2021-26, the Ministry of Industries and Production (MoIP) has been asked to quickly prepare a consolidated policy for car financing in the country.
During a meeting on the new five year auto policy, which was chaired by Federal Minister for Finance and Revenue Shaukat Tarin, a proposal related to car financing was also discussed.
Federal Minister for Industries and Production Khusro Bakhtiar, Advisor to the PM on Commerce Abdul Razak Dawood, SAPM on Finance and Revenue Dr Waqar Masood, secretary Finance Division, secretary Commerce, secretary Ministry of Industries and Production, chairman FBR and other senior officers participated in the meeting.
“The EDB and MoIP in corroboration with other ministries and institutions would be finalising the draft auto policy soon,” sources claimed.
“The proposal has suggested lowering the interest rate for car financing to five to six per cent, besides other facilities. However, the finance minister directed to prepare a comprehensive policy keeping in view policies in other countries of the world,” said an official sources at Engineering Development Board (EDB).
According to the officials the Finance Minister also stressed to come up with innovative products for provision of car financing at reduced mark-up to consumers so that everyone can afford a car at flexible terms and conditions, he added.
During the meeting, secretary Industries and Production briefed the participants about the salient features of the AIDEP draft. The vision of AIDEP shall be to make Pakistan a hub for competitive manufacturing of autoparts and vehicles for local markets as well as for exports.
The key focus is to strengthen the competition within locally manufactured vehicles in order to provide high quality vehicles at affordable prices to the consumers in the country. It also includes increase in export of automobile parts and vehicles to earn a valuable foreign exchange.
The finance minister stated that the proposed AIDEP aims at the expansion of the auto industry in Pakistan by increasing the production of cars, motorcycles, tractors etc. The top most priority is to ensure consumer welfare through availability of cars at affordable rates for the middle and lower income groups.
With this end in view, the government has provided major relief to consumers by reducing sales tax on 850cc cars along with exemption from value-added tax in the federal budget FY22.The Ministry of Industries and Production confirmed that prices of vehicles have been reduced in correspondence with reduction in taxes whereas the industry has widely advertised for the information of the general public. The policy would encourage exports of vehicles and automobile parts.
According to officials privy to the matter, Tarin also underscored the importance of Electric Vehicles (EVs) and affirmed to provide incentives for developing the EV market in Pakistan including charging infrastructure.
He said the promotion of EVs will reduce dependence on oil import bill and promote environment friendly options.
Article continues after this advertisement
Meanwhile, Minister for Industries and Production, Hammad Azhar, said that new entrants may be encouraged in the auto sector particularly for EVs. “This in turn, would encourage auto companies to invest in related infrastructure in Pakistan,” he added.
Further, Razak Dawood stated that the existing tariff structure needs to be rationalised in a phased manner to promote auto industry in Pakistan, keeping in view, the objective of localisation i.e. to encourage local auto industry to come-up with high quality vehicles within affordable range.
Moreover, the finance minister emphasised broad-based consultation with key stakeholders on board to come up with an all-encompassing and futuristic auto policy.