The federal government has rejected an International Monetary Fund (IMF) proposal to impose 18 percent sales tax on electric vehicles under the new Auto Policy 2026-31 and has planned phased cuts in customs duty on eligible imported electric cars, ProPakistani has learnt.
Under the proposed policy, customs duty on eligible electric vehicles priced up to $75,000 will be reduced from 50 percent to 25 percent initially, with a further cut to 15 percent planned by fiscal year 2030-31.
The draft policy also eyes a sales tax of 6 percent on range-extended electric vehicles and 9 percent on plug-in hybrid vehicles and other variable tax categories of alternative-energy vehicles.
Prime Minister Shehbaz Sharif approved the draft Auto Policy 2026-31 on Tuesday. The six-year framework aims to encourage electric mobility through changes in vehicle taxation, including lower import duties on eligible electric cars.
Sources added that the customs duty reductions would be implemented in phases during the policy period.
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