The government gave rebate worth Rs4.71 billion in terms of duties and taxes on hybrid vehicles import in Pakistan of just over 6,400 used luxury hybrid vehicles in 10 months of the current fiscal year.
Out of total imported used hybrid cars, nearly 4,500 were in 1,300-1,500cc range and the rest in over 1,500cc capacity.
By the end of current fiscal year, used hybrid cars import would increase by more than 100 per cent as compared to fiscal year 2014-15, reaching the level of 9,500 units, causing further loss of more than Rs2bn in terms of duties and taxes.
The concessions on used hybrids were granted on the pretext of reducing the import bill of oil as crude oil prices were over $100 per barrel at that time. This rebate in import duty on used hybrid cars led to substantial import of these vehicles.
Recently, oil prices touched as low as $30 per barrel and after some price correction, it is still being sold at less than $50 per barrel, resulting in considerable saving of foreign exchange and import bill. However, savings have almost been nullified by the rebates given on import of used hybrid vehicles.
To prop up sales of hybrid cars and to reduce the balance of payments deficit, the Pakistan government issued SRO-499(I)/2013 allowing local used car dealers to import hybrid vehicles at concessionary duty.
At present, the concessionary rate is 25 per cent for 1,800-2,500cc and 50pc for hybrid cars below 1,800cc.
Hybrid is a new technology that should be promoted at local level instead of imports, said former chairman of Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), Aamir Allawala.
The government must also think about bringing hybrid technology to the country as it would generate more investment and create new jobs, he added.
All assemblers in Pakistan could acquire this technology from their principals if similar concessions are granted to them that have been offered to importers of used hybrids, he said.
He said the government must follow a strategy of ‘Made in Pakistan’ as it would be the critical factor to achieve the 7pc GDP growth target set by the prime minister, leading to creation of jobs for millions of Pakistani skilled workers, technicians, engineers and management professionals.