The federal government is considering a new tax policy that could significantly increase the cost of imported electric vehicles in the upcoming budget for FY2026-27. Under the proposed plan, sales tax on imported electric vehicles may be increased to as much as 25 percent.
Officials say the move is part of broader efforts to support local vehicle manufacturing while managing the country’s import bill. At the same time, tax rates on locally produced hybrid vehicles are expected to remain unchanged to encourage domestic production and investment.
According to reports, several existing tax incentives related to electric vehicles are set to expire on June 30, 2026. These include exemptions on imported completely knocked-down (CKD) kits used by local manufacturers assembling vehicles in Pakistan.
In a related development, the Senate Standing Committee on Finance has approved the Customs (Amendment) Bill, 2026. This legislation extends customs concessions on electric vehicle components and certain vehicle imports, aiming to provide continued support to local assembly and manufacturing industries.
Officials believe these measures are designed to balance two goals: promoting electric mobility in the country and strengthening Pakistan’s local automotive sector. By adjusting tax structures, the government hopes to encourage companies to produce more vehicles locally instead of relying heavily on imports.
Final decisions on taxation will be included in the Finance Bill for FY2026-27. The proposed changes will only take effect after approval from the federal cabinet.
Industry stakeholders are closely watching the developments, as any increase in taxes on imported electric vehicles could affect prices, demand, and overall market growth. Meanwhile, policymakers continue to discuss how to support sustainable transport while protecting domestic industry interests.
