PAC opposes 17% sales tax on electric vehicles

Members concerned over low standard of locally assembled cars

ISLAMABAD:

The Public Accounts Committee (PAC) has expressed concerns over low quality of the locally assembled cars and the spotty implementation of safety standards of vehicles produced in the country.

The committee also expressed their concerns regarding taxes on electric vehicles (EVs). “EVs should not be subject to 13.5% or 17% sales tax,” committee members said.

The committee met under the chairmanship of Noor Alam Khan and was attended by Federal Board of Revenue (FBR) Chairman Asim Ahmed, Secretary Industries and Production Imdad Bosal, CEO of Engineering Development Board (EDB) Raza Abbas Shah, besides other officials including representatives of car companies.

The meeting discussed the matters pertaining to the delays in vehicle delivery and concerns regarding the build quality of the locally manufactured cars.

As the panel initiated the discussion, the committee’s chairman expressed anger over the absence of car company CEOs, secretary of climate change, and secretary of information and technology from the meeting.

An official representing Pak Suzuki Motor Company (PSMC) said that the company currently has orders for 20,000 units, claiming that the new Suzuki cars contain all the safety features, hence the rise in demand.

However, the PAC chairman chided the automobile company’s representative for “misrepresenting” the facts, pointing out that their cars did not even have airbags installed in them.  “Suzuki lied about its safety standards,” he noted.

“In 2010, these companies told this committee that we would make everything locally which has not happened till now," he pointed out.

A PTI MNA berated EDB’s "inability" to use its authority and ensure the development and improvement of Pakistan’s car industry. He said that the people are still awaiting the local manufacturing of cars in Pakistan.

The committee members lamented that the essential components such as engines and drivetrains should be made in Pakistan, flagging the overall quality of locally assembled cars as an “absolute travesty”.

Meanwhile, former minister for science and technology and Senator Shibli Faraz termed the automobiles a “mafia”, asking why the country has been unable to produce engines locally.

As for its part, the EDB clarified that its efforts to boost the country’s car industry have yielded fruits. The ECB’s CEO informed that seven new companies have already started to assemble the cars locally.

He shared that the EDB played a significant role in the said development and added that the EDB was also seeking cooperation from some large groups.

The EDB officials complained that the carmakers do not allow the board to inspect the new vehicles to ascertain whether they meet the safety standards.

In concluding the session, the chairman asked EDB to ensure better output from automakers in terms of quality and service.