Proposal to retain concessions for hybrid carmakers raises eyebrows

While it works to increase revenue collection from all other sectors, the government is said to be considering a proposal seeking the continuation of tax concessions — granted by the PTI government — on the manufacture of hybrid electric vehicles in the upcoming federal budget. Sources privy to the development told Dawn that the government is considering keeping the policy, which amounts to a tax concession of around Rs3 million on the making of an average hybrid vehicle, conservatively priced at Rs12m each. This comes at a time when the automobile sector is reeling from taxes of up to 36 per cent on the manufacture of standard vehicles and several leading automakers have had to enforce production shutdowns in the face of falling demand. An industry insider claimed that the reason for continuing tax concessions on the manufacture of hybrid vehicles was that some leading auto manufacturers were looking to enter the hybrid market and are said to be putting pressure on the government to provide them with a friendly environment.