The government has considered and issued an approval for the imposition of new tax rates on the imports of Completely Built-Up (CBU) vehicles to contain the rising import bill.
According to the official document, the new rates of Regulatory Duties (RDs) have been imposed on Electric Vehicles (EVs), Hybrid Electric Vehicles (HEVs), and Internal Combustion Engine (ICE) powered vehicles in CBU condition.
The following are the new RD rates that have been approved for imposition on the CBU vehicles:
- RD on ICE-powered vehicles with engine displacement above 850cc has been increased from 15 percent to 50 percent
- RD on HEVs with engine displacement between 1,500cc to 1,800cc also increased from 15 percent to 50 percent
- RD on EVs with battery-packs larger than 50 kWh also increased to 50 percent, though a Statutory Regulatory Order (SRO) is yet to be issued in this regard
The Ministry of Industries and Production (MoIP) has also proposed an increase in the Federal Excise Duties (FEDs) on the imports of locally assembled vehicles to pin down the exponential growth of automotive imports.
The approved increase in levies for locally manufactured vehicles is relatively smaller, compared to those on CBU vehicles. Regardless, the prices of vehicles above a certain engine displacement are likely to witness another jump, said a source privy to the matter.
The following are original FED rates proposed by the MoIP for imposition on the locally manufactured vehicles:
- FED on locally manufactured passenger vehicles from 1,500cc and above to be enhanced to 10 percent (existing is 5 percent)
- FED on 1,501-1,800 cc cars and SUVs in CBU condition to be increased to 10 percent (existing is 5 percent)
Although the complete details on the FED rates are yet to be revealed, sources claim that these rates have reportedly been modified by the government to favor the locally assembled car segment.
