Tax breaks kick Pakistan’s electric car shift into higher gear 

Pakistan's energy minister Omar Ayub Khan and Prime Minister's advisor on Petroleum Nadeem Babar charge an electric car during the inauguration ceremony of country's first electric vehicle charging station, in Islamabad on July 29, 2020. (AFP/File)
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Updated 22 November 2021
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Tax breaks kick Pakistan’s electric car shift into higher gear 

  • Pakistan’s electric vehicle push is picking up speed, nearly two years after the country launched its ambitious green policy
  • Policy aims to put half a million electric motorcycles, rickshaws and 100,000 electric vehicles into the transportation system by 2025

ISLAMABAD: Pakistani businessman Nawabzada Kalam Ullah Khan had been planning to swap his family’s petrol-powered cars for electric models for years.
But it wasn’t until a set of massive tax cuts came into effect in July that the 29-year-old from Pakistan’s capital Islamabad finally put in an order for two electric cars.
“Someone has to take the initiative to switch to these cost-efficient, environment-friendly vehicles in the face of increasing pollution in big cities — and we’ve done it,” Khan said.
His new cars, he said now cost about five times less to run day to day than his old vehicles, a major incentive to make the switch.
Major Pakistan and Indian cities are struggling with dangerous levels of air pollution, with Pakistan’s Lahore this week declared the most polluted city in the world.
Heavy use of fossil-fuel-powered vehicles for transport combined with smoke from seasonal crop burning make the problem particularly severe at this time of year.
But Pakistan’s electric vehicle push is picking up speed, nearly two years after the country launched its ambitious green policy, which envisions a shift to 30 percent electric cars and trucks nationwide by 2030, and 90 percent by 2040.
Key to the shift are hefty tax exemptions for both electric vehicles imports and imports of parts and equipment to build the cars in Pakistan.
That has helped make the vehicles more affordable, industry figures said, as Prime Minister Imran Khan’s government pushes ahead with its plan to cut carbon emissions and urban pollution.
FALLING TAXES
The general sales tax on locally manufactured electric cars — those with batteries holding less than 50-kilowatt hours (kWh) of power — has dropped from 17 percent to nearly zero, said Asim Ayaz, general manager of the government’s Engineering Development Board (EDB).
At the same time, the customs duty on imported electric car parts — such as batteries, controllers and inverters — is down to 1 percent.
The duty on importing fully built electric cars also has fallen from 25 percent to 10 percent for one year, Ayaz told the Thomson Reuters Foundation.
Officials say the tax relief is a big step toward implementing Pakistan’s National Electric Vehicle Policy, originally passed by the cabinet in November 2019.
It aims to put half a million electric motorcycles and rickshaws and 100,000 electric cars, vans and small trucks into the transportation system by 2025.
“Definitely the tax exemptions make the price point (on electric vehicles) competitive,” said Malik Amin Aslam, the special assistant to the prime minister on climate change.
“It makes it extremely attractive for the customer to go electric.”
Aslam said if about a third of new cars sold run on electricity by 2030, as envisioned, Pakistan could see a big drop in climate-changing emissions and pollution.
Electric vehicles currently produce 65 percent fewer planet-warming gases than those running on fossil fuels, he said.
Pakistan ranks second, behind Bangladesh, according to a list of nations with the worst air quality compiled last year by IQAir, a Swiss group that measures levels of lung-damaging airborne particles known as PM2.5.
In Punjab, Pakistan’s most populous province with Lahore as its capital, transport accounts for more than 40 percent of total air-polluting emissions, followed by industry and agriculture, according to a 2019 study by the United Nations’ Food and Agriculture Organization.

OVERCOMING DOUBTS
Shaukat Qureshi, general secretary of the Pakistan Electric Vehicles and Parts Manufacturers and Traders Association, said the new tax cuts mean savings of up to 500,000 rupees ($2,900) on imported small electric vehicles.
He said many members of the association have used the incentives to order them for the first time.
There are no reliable figures on how many electric cars local importers have ordered brought into the country since the government announced the exemptions.
But in his other role as chief operating officer of car company Zia Electromotive, which imports and manufactures electric vehicles, Qureshi said he has ordered 100 small electric cars from China and plans to import 100 more every month after that.
Pakistanis — like many other people around the world — have historically been reluctant to switch to electric vehicles for reasons ranging from higher costs to lack of charging infrastructure and “fear of the unknown,” said Ayaz at the EDB.
The tax cuts help remove the cost obstacle, he said — and could help create about 20,000 new jobs in the auto industry as Pakistani car companies start manufacturing electric cars, he predicted.
The charging infrastructure issue remains, though some companies have already established charging stations in big cities and along motorways.
Climate change and development expert Ali Tauqeer Sheikh said the government should encourage the private sector to install more charging stations near offices, homes and parking lots.
To overcome worries that electric vehicles may have no resale value, car manufacturers and dealers could offer buy-back guarantees, he added.
But, Sheikh said, simply selling more electric cars is not enough to tackle Pakistan’s emissions and air pollution, since the total number of vehicles being sold — mainly traditional cars — is still growing every year.
He said the government needs to push to completely phase out fuel-run and hybrid vehicles by increasing taxes on them and provide affordable bank loans for people looking to buy electric.
“Poor people who use motorbikes and rickshaws deserve to have more electric vehicles on the roads to cut air pollution,” he said.


PM Sharif calls for economic policies to revive Pakistan’s export competitiveness

Updated 23 May 2025
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PM Sharif calls for economic policies to revive Pakistan’s export competitiveness

  • The PM outlines the goal during a meeting with Dr. Stefan Dercon, a prominent British economist
  • He calls for deep-rooted reforms to steer Pakistan’s economy back toward export-led growth

ISLAMABAD: Prime Minister Shehbaz Sharif on Thursday stressed the need for balance across all economic policies to revive Pakistan’s export potential, saying his government wanted to take the country back to a place where its products were once again in global demand.
The remarks came during a meeting with Dr. Stefan Dercon, a prominent British economist and professor of economic policy at Oxford University.
Dercon, who previously served as the UK Department for International Development’s (DFID) chief economist, is widely recognized for his work on poverty, institutional reform and economic development in low- and middle-income countries.
“A sound balance across all policies is essential to promote business,” the prime minister was quoted as saying in an official statement circulated by his office. “For Pakistan’s economic development, alignment between fiscal policy, taxation policy and production policy is necessary.”
“In the past, Pakistani products were in high demand globally and the country was counted among the world’s major exporters,” he continued. “We want to bring Pakistan back to that place.”
Sharif’s meeting with the British economist took place at a time when Pakistan seeks to strengthen its economy through increased exports and foreign investment, following signs of stabilization under an IMF-supported economic program.
He maintained that deep-rooted reforms were required to transition the national economy back toward export-led growth.
Dercon praised the direction of Pakistan’s economic policy and reform agenda, noting improving investor sentiment toward the country.
He particularly lauded Pakistan’s tariff rationalization efforts, which aim to simplify and streamline import duties to support industrial competitiveness.
The meeting was also attended by top members of the government’s economic team, including Finance Minister Muhammad Aurangzeb, Planning Minister Ahsan Iqbal and senior officials from relevant departments.


IMF defends $1 billion disbursement to Pakistan amid India’s objections

Updated 23 May 2025
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IMF defends $1 billion disbursement to Pakistan amid India’s objections

  • IMF communications director says the board approved funding as Pakistan had ‘met all of the targets’
  • She clarifies EFF disbursements go to the central bank and are not used to fund the national budget

KARACHI: The International Monetary Fund (IMF) this week defended its decision to release a $1 billion tranche to Pakistan, despite India’s concern over its potential misuse, by pointing out the country had met all requisite targets under the Extended Fund Facility (EFF).

India had raised objections to the IMF’s disbursement amid a military confrontation with Pakistan, saying the funds could be diverted to support activities that it described as detrimental to regional stability. New Delhi abstained from the IMF Executive Board vote on May 9, highlighting apprehensions about the timing and potential implications of the financial assistance.

During a news briefing in Washington on Thursday, IMF Communications Director Julie Kozack addressed these concerns, saying the international lender provided financing to member states for the purpose of resolving balance of payments problems.

“In the case of Pakistan … the EFF disbursements … are allocated to the reserves of the central bank,” she said. “Under the program, those resources are not part of budget financing … [and] are not transferred to the government to support the budget.”

The IMF official further emphasized the Fund’s decision was based on Pakistan meeting all the targets set under the loan program.

“Our Board found that Pakistan had indeed met all of the targets,” she continued. “It had made progress on some of the reforms, and for that reason, the Board went ahead and approved the program.”

Kozack also outlined the safeguards to prevent any potential misuse of funds, including targets on the accumulation of international reserves and a zero target for central bank lending to the government.

She also noted the program includes substantial structural conditionality aimed at improving fiscal management.

The IMF’s disbursement this month was part of a broader $7 billion support program aimed at stabilizing Pakistan’s economy. The Fund has said future disbursements will depend on Pakistan’s continued adherence to the program’s conditions and reforms.
 


PM Sharif tells business leaders private sector key to economy ahead of June 10 budget

Updated 23 May 2025
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PM Sharif tells business leaders private sector key to economy ahead of June 10 budget

  • The prime minister assures chambers of commerce representatives of his administration’s full support
  • He promises to reduce cost of doing business in the country, highlights zero tolerance for tax evasion

ISLAMABAD: Prime Minister Shehbaz Sharif on Friday emphasized the pivotal role of the private sector in driving economic development, asserting that a robust public-private partnership was essential for the country’s emergence as a strong global economy.
Sharif made these remarks during a meeting with presidents of chambers of commerce from across the nation, coinciding with the government’s announcement to present the next federal budget on June 10.
The government has consistently stressed the need for the private sector to lead in strengthening the national economy, assuring it of state support.
Sharif reiterated this stance, highlighting the necessity of collaboration between the government and private enterprises in the country.
“There is a need to mobilize the private sector to achieve economic self-reliance,” the Prime Minister’s Office quoted him as saying during the meeting.
“Protecting the rights of the Pakistani business community and providing them with a conducive environment for profitable business are among the top priorities of the government,” he continued.
Sharif also pledged to reduce the cost of doing business in Pakistan, noting that measures were being implemented to facilitate access to loans and reduce electricity prices.
Addressing tax compliance, he emphasized a zero-tolerance policy toward tax evasion. Pakistan has historically one of the lowest tax-to-GDP ratios in the region.
The government has tried to addressed the situation by reforming its tax collection body through increased automation to improve collection and compliance.
The official statement said the delegation of business leaders commended the government’s economic policies, citing gradual improvements in the national economy and business environment.
They also presented budget proposals for the upcoming fiscal year.
Pakistan is scheduled to release a comprehensive economic survey for the outgoing fiscal year on June 9, only a day ahead of the budget preparation.


Pakistan says 25,698 pilgrims to perform Hajj under private quota in 2025

Updated 23 May 2025
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Pakistan says 25,698 pilgrims to perform Hajj under private quota in 2025

  • The annual pilgrimage is expected to take place between June 4 and June 9 this year
  • Around 55,642 Pakistani Hajj pilgrims have landed in Saudi Arabia so far via 244 flights

ISLAMABAD: Pakistan’s religious affairs minister, Sardar Muhammad Yousaf, said on Friday only 25,698 pilgrims would be able to perform Hajj this year under the private scheme, after thousands of allocated slots were revoked due to non-compliance by private operators with Saudi booking rules and deadlines.

The kingdom had granted Pakistan a total quota of 179,210 pilgrims for Hajj 2025. Typically, this national quota is evenly split between the government-run and private schemes. However, the private sector failed to meet procedural requirements set by Saudi authorities, leading to a significant cut in their share, down from 89,801 to just over 25,000, leaving more than 67,000 would-be pilgrims affected.

“25,698 people will be able to go for Hajj under the private quota,” Yousaf said while addressing a press conference.

“Up until February 14, only 3,600 pilgrims had submitted their payments, but after a one-week extension, 10,000 more applications were received, bringing the total number to 13,000.”

He highlighted that private Hajj operators had registered 904 companies with the Saudi authorities, based on a list provided by the religious affairs ministry. However, some people ignored this and made payments to unregistered Hajj operators.

Yousaf assured that a committee formed by Prime Minister Shehbaz Sharif would investigate the issue.

He said Pakistan International Airlines, Saudi Airlines, Air Sial, Airblue, and Serene Air would be transporting Pakistani pilgrims for Hajj.

Earlier in May, a ministry spokesperson issued guidelines for Hajj pilgrims, including verifying the authenticity and quota approval of private tour operators before making payments, visiting the ministry’s official website to confirm registration and avoiding reliance on unverified advertisements or information.

The ministry strongly urged all prospective pilgrims to exercise utmost caution when booking Hajj packages through private tour operators.

Some registered private organizations also failed to pay dues within the timeline set by Saudi authorities, prompting Sharif to intervene and request an extension of the deadline, which was approved.

This year’s annual pilgrimage is expected between June 4 and June 9, with nearly 89,000 Pakistanis traveling to Saudi Arabia under the government scheme.

Pakistan launched its Hajj flight operation on April 29.

Around 55,642 Pakistani Hajj pilgrims have landed in Saudi Arabia so far via 244 flights.


Karachi hospital reports four COVID-19 deaths amid surprise summer surge

Updated 23 May 2025
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Karachi hospital reports four COVID-19 deaths amid surprise summer surge

  • A senior physician says all those who succumbed to the disease in the past fortnight were elderly individuals
  • Health experts say the recent surge in coronavirus cases during the summer months is an unusual trend

KARACHI: At least four people with underlying health conditions have died of COVID-19 at a major Karachi hospital in the past two weeks, as experts report an unusual spike in infections during the city’s peak summer season.

All four fatalities occurred at the Aga Khan University Hospital (AKUH), where doctors say they are seeing a steady increase in admissions linked to the coronavirus— a trend they describe as “unexpected” at this time of year.

“In the past two to three weeks, we have seen a significant increase in COVID cases,” Prof. Dr. Syed Faisal Mahmood, a professor of infectious diseases at AKUH, told Arab News, confirming the death of four people during the past two weeks.

The surge, he said, was happening in late spring with temperatures exceeding 40 degrees Celsius.

COVID-19, caused by the SARS-CoV-2 virus, is a highly contagious respiratory illness that was first detected in late 2019 and declared a global pandemic within months. While the virus typically spreads more easily in colder months due to increased indoor activity and lower humidity, experts say its spread during summer in Karachi is a rare deviation from past seasonal patterns.

Mahmood said most infected individuals have been coming to the hospital with mild symptoms, such as sore throat, cough, body aches, and fever, but the virus remains dangerous for older adults and those with weakened immune systems.

“Like in previous years, this year the severe cases of COVID are mostly being seen in people who are older, especially those above 65, or those with weak immune systems,” he said.

“Among these COVID cases, there are some patients who have been hospitalized, and there have also been some deaths,” he added.

Mahmood added that while routine testing is no longer required for everyone with symptoms, caution is essential.

“If you suspect that you have COVID or any other cold or cough-related infection, it is better that you wear a mask,” he advised. “We recommend wearing a mask for at least five to ten days so that others do not get infected.”

The infectious diseases expert also urged caution for those in close contact with the elderly.

“If you are caring for someone who is elderly, then please do not visit them if you are feeling unwell, or at least wear a mask,” he said. “Please take care of yourself, and we hope that there will not be a major further increase in COVID cases.”