Budget 2018-19 Relief Measures: Massive Reduction in Taxes on Electric Cars & More

Pakistan government has announced some tax changes for the fiscal budget 2018-19. We’ve compiled a list of relief measures and tax reductions on imports and investments announced during the budget 2018-19. The salient features include an increase in custom duties for most imports but overhauled relief measures to encourage exports and agricultural production.

Among the most notable announcements was the elimination of regulatory duty and reduction in customs duty on the import of electric vehicles in Pakistan. Similarly, charging stations for electric vehicles have also seen a marked reduction in duties, down from 50% to 10%.

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All tax changes and their respective items have been included in the list below. Read on to get a detailed insight into tax rates and newly introduced reliefs.

Relief Measures

1. To standardize printing and preservation of Holy Quran, import of duty-free paper weighing 60 g/m2 is allowed besides extending this facility to Nashir-e-Quran registered with the government.
2. For the promotion of exports, CD on raw materials/inputs (104 PCTs) withdrawn and (28 PCTs) reduced.
3. Reduction of CD on Multi-ply and Aluminum foil from 20% to 18% for Liquid Food Packaging Industry.
4. Reduction of CD on finished rooms (Pre-fabricated structures) from 20% to 10% for setting up of new hotels/motels.
5. To support dairy sector, CD exempted on bovine semen, and preparations for making animal feed reduced from 10% to 5% and import of fans for corporate dairy farmers allowed at concessionary rate of 3%.
6. Reduction of CD on growth promoters premix, vitamin premix, Vitamin B12 and Vitamin H2 for poultry sector from 10% to 5%.
7. To encourage local manufacturing of Optical Fiber Cables, CD on input materials i.e, Optical fiber (20%), Cable filing compound (11%), Polybutylene (20%), Fiber reinforced plastic (20%) and Water blocking/ swellable tape (11%) reduced to 5% besides reduction of RD on Optical Fiber Cables from 20% to 10%.
8. CD on specified equipment used in cinema industry reduced to 3%.
9. Withdrawal of 11% CD on acrylic tow.
10. Exemption of 3% CD on Micro Feeder Equipment used for food fortification.
11. Exemption of 5% CD on Tasigna (anti-cancer medicine).
12. Reduction of CD on Acetic Acid from 20% to 16%.
13. Exemption of 16% CD on charging stations for electric vehicles.
14. Reduction of CD on plasters from 16% to 11%.
15. Reduction of CD on film of ethylene from 20% to 16% for Liquid Food Packaging Industry.
16. Reduction of CD on Carbon Black (rubber grade) from 20% to 16%.
17. Reduction of the concessionary rate of CD from 10% to 5% on silicon electrical steel sheets for manufacturing transformers.
18. Exemption of 5% CD on specified LED parts and components for manufacturers of LED lights and Levy of 2% RD on LED bulb & Tubes, Energy Saving Bulbs & Tube to protect local industry.
19. Exemption of 3% CD on tanned hides in wet state.
20. Withdrawal of CD on two catalysts for use by PTA industry i.e. Hydrogen Bromide (11%) and Palladium-on-carbon (3%)
21. Reduction of CD from 16% to 8% on Coils of aluminium alloys used in the manufacturing of Aluminium beverage cans
22. Reduction of CD on the import of coal, across the Board, from 5% to 3%.
23. Reduction of CD on the import of Firefighting vehicles from 30% to 10%
24. Concessionary import of vintage or classic cars and jeeps at fix duty/taxes of US$ 5,000.
25. Reduction of CD from 50% to 25% and Exemption of 15% RD on Electric Vehicles and CD on kits of electric vehicle reduced from 50% to 10%.
26. Import of solar panels were exempted from the condition of ‘local manufacturing’ till 30th June 2018 which is extended till 30th June, 2019.

Tariff Ratinalization

1. Increase of CD on double-sided tape from 3% to 11%.
2. To protect domestic manufacturers, an increase of CD on rickshaw tyres from 11% to 20%.
3. Increase of CD on Soya bean oil from Rs.9050/MT & Rs.10200/MT to 12000/MT and Rs. 13,200/MT respectively.
4. Increase of CD on aluminum auto parts scrap from 30% to 35%.
5. Increase of CD on Di-octyl Terephthalate (DOTP) from 3% to 20%.
6. Reduction of CD from 16% to 11% and levy of 5% RD on Medium Density Fiber.
7. Reduction of CD on corrective glasses from 11% to 3%.
8. Reduction of CD on Lithium iron phosphate battery (LiFePO4) from 11% to 8%.
9. New PCT codes created for Radial tyres, CKD/SKD kits for home appliances, CKD / SKD of Mobile Phone, Semi-automatic washing machines, Petrol Generating sets, Kerosene based mineral oils, Relays, Fuses, Gear pumps and Turbo chargers  for vehicles, Electric conductors, Light fittings with fixed/fitted LED/SMD, , Refrigerated out door cabinet designed for insertion of electric and electronic apparatus, Digital/Processed Printing Inks, DOTP (Di-Octyl Terephthalate) and Pigments and preparations based thereon.

Review of Regulatory Duty

1. Levy of 30% RD on the export of waste & scrap of copper
2. Review of RD on non-essential and luxury items
3. 10% RD levied on CKD/SKD kits of specified Home Appliance
4. Levy of RD @ Rs.175/set on CKD/SKD kits of mobile phone

Revenue Measures

1. Increase of additional customs duty from 1% to 2%