Budget 2024: Senate body opposes proposed tax on electric vehicles

Senate Body on Finance has opposed the proposed tax on hybrid and electric vehicles included in the new budget.

The meeting was chaired by Senator Saleem Mandviwala in Islamabad.

At the session, the chairman of the Federal Board of Revenue (FBR) announced the abolition of the 25% tax exemption for luxury vehicles costing over Rs15 million. He emphasized that this was not an FBR decision but a proposal from the Ministry of Industries and Production.

Senator Faisal Vawda expressed his dissatisfaction, stating, "A tax on hybrid and electric vehicles is unacceptable." He called on the committee

During a meeting chaired by Senator Salim Mandviwala, the Senate Standing Committee on Finance firmly opposed the proposed tax on hybrid and electric vehicles included in the new budget.

The chairman of the Federal Board of Revenue (FBR) clarified during the session that the 25% tax exemption for luxury vehicles priced over Rs15 million had been eliminated. He noted that this proposal originated from the Ministry of Industries and Production, not the FBR.

Senator Faisal Vawda voiced his strong objection, declaring, "Tax on hybrid and electric vehicles is not acceptable." He urged the committee to summon the responsible minister for an explanation, warning, "This tax has to be abolished, or I will speak up openly."

Vawda further criticized the inconsistency of policies, stating that it discouraged him from investing in industries in Pakistan.

The committee decided to call Federal Minister Rana Tanveer Hussain to address the issue and explain the rationale behind the tax proposal.

Amidst the budget 2024-25 proposals, there was a positive note for buyers of new and old hybrid vehicles with engine capacities up to 1800cc, as it was suggested that they would continue to enjoy zero duty, providing some relief despite the anticipated price increases.