Hybrid vehicles in Pakistan have become significantly more expensive after the government increased the sales tax on Hybrid Electric Vehicles (HEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) from 8.5% to 25%.
The tax increase follows the expiry of the reduced sales tax concession on June 30, 2026, ending a policy that had offered lower taxation on hybrid vehicles to encourage their adoption.
With the concession no longer in place, hybrid vehicles are now subject to the standard 25% sales tax, a move that is expected to increase vehicle prices and impact buying decisions in the local market.
Industry experts believe the higher tax could slow the growth of Pakistan’s hybrid vehicle segment, as consumers may face significantly higher costs when purchasing new HEVs and PHEVs.
The revised tax regime affects a wide range of hybrid models available in Pakistan and is expected to influence pricing across the automotive industry.
