Favorable tax, duty treatment to NEVs to cost govt Rs150bn annually

Business Recorder reported that the government is granting unusually generous tax and duty relief to New Energy Vehicles, including a flat 1 per cent sales tax regime, which could forgo around Rs150 billion in revenue each year. The estimate comes from Abdul Rehman, former chairman of PAPAAM, who based it on annual NEV sales of roughly 50,000 units and an average duty and tax reduction of about Rs3 million per vehicle. He argued that the sum represents a substantial fiscal choice at a time when the state is seeking additional revenue elsewhere.

Rehman acknowledged that cleaner transport, lower fuel imports, reduced emissions and a homegrown EV industry are legitimate national goals. He questioned, however, whether subsidising an expensive private car is the most equitable use of such funds. In his view, the same money could finance electric buses, charging networks, electric two-wheelers and rickshaws, public transport, and local battery manufacturing, reaching a wider share of the population.

He also compared the outlay with higher education, noting that the concession is roughly four times the sum allocated to that sector. The article frames the central question as whether the support is distributed fairly and yields the strongest economic return, with any subsidy expected to deliver public benefit in line with its budgetary cost.