The federal government has rejected the Engineering Development Board’s (EDB) request for tax exemptions on imported parts of electric bikes, sources told.
As a result, customs duty on EV bike components, previously set at 1 percent, could now increase to between 30 and 35 percent.
According to sources, Prime Minister Shehbaz Sharif was briefed on the launch of the EV bike scheme based on incorrect figures. The move is expected to impact the prices and overall structure of the scheme, which had earlier benefited from concessions on batteries, motors, chargers and converters since July 1, 2020.
Officials said that under the Auto Industry Development Policy 2021–26, an application for extension of these tax concessions was supposed to be submitted ahead of the federal budget. However, with the rejection, the industry is now bracing for higher costs.
Meanwhile, the EDB has been functioning without a permanent CEO for the past 14 months and without a board for over a year following the resignation of its chairman. Despite EDB rules limiting ad hoc appointments to two months, Khuda Bakhsh Ali has been serving as acting CEO for over a year.
The lack of leadership has left the EDB struggling with governance challenges. Sources further revealed that the Motor Vehicle Industry Act was prepared without the board’s approval, underscoring the institution’s weakened role in policymaking.
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