Some influential industry players are pressuring the Federal Board of Revenue (FBR) and the International Monetary Fund (IMF) to weaken Pakistan’s Auto Policy 2026–31 and roll back incentives aimed at promoting new energy vehicles (NEVs), sources told ProPakistani.
According to the sources, some key decision-makers and market players are coordinating efforts to push for higher sales taxes on electric vehicles, potentially undermining the government’s plans to encourage electric mobility.
The proposed Auto Policy 2026–31 provides different tax rates for battery electric vehicles, range-extended electric vehicles, and plug-in hybrids.
The government has rejected the IMF’s proposal to impose a uniform 18 percent sales tax on electric vehicles. Instead, the draft policy proposes a 6 percent sales tax on range-extended vehicles and 9 percent on plug-in hybrids.
Push to Increase Taxes on Electric Vehicles
Sources said certain industry players were approaching the FBR and IMF to push for higher taxes on NEVs, putting the proposed incentives at risk.
The draft policy aims to make electric vehicles more affordable by reducing their tax burden. It also proposes lower customs duties on eligible imported electric vehicles and wider financing opportunities for buyers.
However, any move to reverse these concessions could increase the purchase cost of electric vehicles and discourage consumers from switching away from conventional fuel-powered vehicles.
The proposed policy is intended to accelerate Pakistan’s transition towards new energy vehicles, encourage investment in electric mobility, and reduce dependence on conventional fuels.
Sources warned that weakening the proposed incentives could slow down the country’s electric vehicle transition before the new policy is fully implemented.
