Pak Suzuki And Industry Analysts Say NEV Incentive Structure Disproportionately Benefits Wealthy Buyers While Middle-Class Families In Entry-Level Cars Carry The Heaviest Tax Burden Under IMF-Era Fiscal Policy
According to The Express Tribune, Pakistan’s vehicle taxation structure has drawn sharp criticism from local auto manufacturers who argue that the government’s new energy vehicle (NEV) incentive policy creates a deeply regressive outcome; taxing the cheapest cars most heavily while granting the largest concessions to premium vehicles purchased by the wealthy.
The disparity is starkest in a direct comparison: a Suzuki Alto, Pakistan’s most affordable passenger car at around Rs3 million, attracts nearly Rs550,000 in combined sales tax, federal excise duty and NEV levy. A range-extended electric vehicle (REEV) costing close to Rs10 million pays only around Rs100,000 in sales tax and is exempt from both FED and the NEV levy — a Rs450,000 difference on a vehicle worth more than three times as much.
Pak Suzuki spokesperson Ikhlaq Virk said the policy creates an uneven playing field. “Vehicles such as Alto and Cultus serve as basic mobility options for middle-income families yet receive no meaningful tax relief,” he said. Chase Securities Director Research Yousuf Farooq agreed that concessions must be linked to vehicle affordability, localisation and environmental impact; not concentrated at the upper end of the market.
A Rs3 million car pays five times more tax than a Rs10 million one. That is not a green policy. That is a subsidy for the rich.
Check out our previous coverage of Pakistan’s economy on The Trusted Times.
