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Senators slam FBR chief over tax hike on hybrid, electric cars

ISLAMABAD: Senators on Thursday slammed Federal Board of Revenue (FBR) Chairman Asim Ahmad for increasing taxes imposed on hybrid and electric cars, among others.

The Senate Standing Committee on Finance, in a meeting chaired by Pakistan People’s Party (PPP) Senator Salim Mandviwala, in Islamabad has raised objection over the increased tax rate on electric and hybrid vehicles.

During the meeting, independent senator Faisal Vawda said that the use of electric vehicles is being encouraged around the world.

“A sales tax of 25% has been imposed on vehicles priced above Rs 15 million,” Vawda said.

The senator argued that problems increase when a policy is formulated and revised. “No one creates industry in this country because of changes in taxes and policies.”

Responding to Vawda’s objections, FBR officials said imported, not locally manufactured, vehicles have been taxed. Reacting to this, the politician said he knows who taxes the vehicles as it is his business.

The committee, however, discontinued the matter at the meeting.

The politician, who is a member of the Senate in an independent capacity, opposed the tax proposals made in the budget, announced last week by the federal government.

The government, analysts say, crafted the budget in line with the recommendations of the International Monetary Fund (IMF) as Islamabad hopes to sign a new and bigger program with the global lender.

The federal government has had to raise taxes and reduce the budget deficit as part of negotiations with the IMF, with which it is discussing a $6 billion to $8 billion loan, as it seeks to avert a default for its slowest-growing economy in the area.