By Web Desk — The auto industry has informed the government that the imposition of new taxes on locally-assembled vehicles is a deviation from the Automotive Industry Development and Export Plan (AIDEP) 2021-26.

According to a letter to the Ministry of Industries and Production, the local auto vendors and spare parts manufacturers fear that the duties and taxes imposed recently in the mini-budget could trigger a serious crisis for automobile assemblers and vendors.

From 1,001cc to 2,000cc cars, the Federal Excise Duty (FED) increased to 5pc from 2.5pc, and from 2,000cc to 4,000cc, the FED increased to 10pc from 5pc.

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Furthermore, the government has proposed an increase in tax on imported hybrid vehicles (851cc to 1800cc) from 8.5pc to 12.5pc, and an increase in tax on electric vehicles (EVs) in CBU conditions from 5pc to 17pc.

Syed Muhammad Ishtiaq, CEO of S.M. Engineering, told media persons on Thursday that the auto sector requires stable policies but that the government has deviated from the policies in place.

The industry demanded that the government stick to the AIDEP and refrain from changing it after intervals, as this creates a lack of trust between investors and the country.

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