FPCCI demands rollback of high taxes on hybrid cars

Pakistan's auto industry faces chaos as the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) demands an immediate rollback of a steep tax increase on hybrid vehicles. The sales tax has surged from a preferential 8.5% to a general rate of 25%, a move the FPCCI warns is short-sighted and detrimental to both consumers and the sector.

Adeel Siddiqui, an FPCCI Executive Committee member, highlighted that the tax concessions for hybrid vehicles expired on June 30. With no new auto policy in place, the Federal Board of Revenue reinstated the higher sales tax. This drastic increase, from rates of 8.5% for vehicles up to 1800cc and 12.75% for those above, has left automakers in a state of confusion.

Consequently, several automakers have temporarily suspended production and stopped issuing invoices. They are uncertain about which sales tax rate to apply amidst the policy vacuum. The FPCCI is urgently calling for the notification of a new auto policy to provide clarity and stabilize the industry.

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this short-sighted policy would hurt consumers and cripple the auto industry.