Government Considers Reducing Sales Tax on Hybrid Vehicles to 18%

The Federal Government of Pakistan is reportedly considering reducing the sales tax on imported and locally assembled hybrid electric vehicles (HEVs) from 25% to 18%. The proposal is aimed at making environmentally friendly vehicles more affordable and encouraging the adoption of cleaner transportation.

According to publicly available reports, a summary has been submitted to the Finance Division, while the proposal will require approval from the federal cabinet before it can be implemented.

The proposed reduction comes after the previous concessional tax rate expired on June 30, 2026, causing the applicable sales tax on hybrid vehicles to increase to 25% from July 1, 2026.

If approved, the revised tax rate is expected to lower the cost of hybrid vehicles, making them more accessible to consumers while supporting Pakistan's long-term environmental and energy goals.

Industry experts believe the move could encourage greater adoption of fuel-efficient vehicles, reduce reliance on conventional fuel-powered cars, lower carbon emissions, and contribute to the growth of Pakistan's automotive sector.

The proposal also aligns with broader efforts to promote sustainable transportation and cleaner mobility solutions as demand for hybrid and electric vehicles continues to grow worldwide.

Disclaimer: This article is for informational purposes only and is based on publicly available reports. The image is AI-generated and is for reference only.