Pakistan’s Auto Policy 2026–31 is facing pressure from some industry players seeking changes to proposed tax incentives for new energy vehicles (NEVs), according to sources familiar with the matter. The sources told ProPakistani that certain industry stakeholders are lobbying the Federal Board of Revenue (FBR) and the International Monetary Fund (IMF) to push for higher sales taxes on electric vehicles, potentially delaying the country’s transition to cleaner transportation.
The proposed policy offers different tax rates for battery electric vehicles, range-extended electric vehicles and plug-in hybrids. The government previously rejected the IMF’s proposal to impose a uniform 18 percent sales tax on electric vehicles. Instead, the draft policy proposed a 6 percent sales tax on range-extended vehicles and 9 percent on plug-in hybrids.
The policy also aims to reduce customs duties on eligible imported electric vehicles and expand financing options for buyers. However, sources warn that reversing these incentives could weaken efforts to promote electric mobility and slow Pakistan’s transition towards new energy vehicles. Further details are expected as discussions over the policy continue.
