Pakistan released its proposed Auto Policy 2026-31, detailing a revised sales tax structure for battery electric vehicles, range-extended electric vehicles, plug-in hybrids, conventional hybrids, and petrol-powered vehicles.
Different tax rates appear in the draft based on vehicle powertrain technology, according to a comparison of existing and proposed figures.
Plug-in hybrid electric vehicles with engine capacities up to 2,000cc would see sales tax drop from 18% to 9%. For plug-in hybrids above 2,000cc, the rate would fall from 25% to 9%.
Internal combustion engine vehicles with capacities from 1,400cc to 2,000cc would experience a sales tax reduction from 25% to 18%. Internal combustion engine vehicles up to 1,400cc would stay at 18%, and those above 2,000cc would remain at 25%.
Range-extended electric vehicles would face an increased sales tax moving from 1% to 6%, representing a rise of five percentage points. Battery electric vehicles would keep their current 1% sales tax rate.
Conventional hybrid electric vehicles would see no changes in the draft policy. Sales tax stays at 18% for models up to 2,000cc and 25% for models above 2,000cc.
