Urdu Report Desk
Pakistan’s federal government has rejected an International Monetary Fund (IMF) proposal to impose an 18% sales tax on electric vehicles under the proposed Auto Policy 2026-31.
According to sources, the government also plans to gradually reduce customs duties on eligible imported electric vehicles as part of efforts to encourage electric mobility.
Phased Cuts in Customs Duties
Under the proposed policy, the customs duty on eligible electric vehicles priced at up to $75,000 would initially be reduced from 50% to 25%.
The duty is planned to be lowered further to 15% by fiscal year 2030-31. Sources said the reductions would be introduced in phases during the policy period.
Different Tax Rates for Alternative-Energy Vehicles
The draft policy also proposes different sales tax rates for other categories of alternative-energy vehicles.
Range-extended electric vehicles would be subject to a proposed sales tax of 6%, while plug-in hybrid vehicles would face a rate of 9%. Other categories of alternative-energy vehicles may also be subject to varying tax rates.
Prime Minister Approves Policy Draft
According to the report, Prime Minister Shehbaz Sharif approved the draft Auto Policy 2026-31 on Tuesday.
The six-year policy framework aims to encourage electric mobility through changes to vehicle taxation, including lower import duties on eligible electric cars.
The proposed customs duty reductions are expected to be implemented gradually throughout the policy period.
