Govt unveils auto policy with five-year tariff cuts, EV tax breaks

Pakistan’s federal government has introduced a five-year auto-sector plan combining annual tariff reductions with export and local-content requirements, Profit by Pakistan Today reported on Saturday. Officials said the changes are intended to reduce manufacturing expenses and vehicle prices, while manufacturers that meet export and domestic production goals could receive tax-and-duty rebates. The package also adds 45 safety requirements based on the United Nations’ WP.29 code.

The proposal offers sales tax rates of 1% for fully electric vehicles, 6% for range-extended models and 9% for hybrids, subject to IMF approval. EVs priced at $50,000 or less would receive exemptions from CVT, withholding tax and FED, while the SBP financing ceiling for EV purchases would rise from Rs3 million to Rs10 million and repayment could extend to five years. The government also plans to lower taxes on charging equipment; it said vehicles below 1,000cc would not face the new additional levies.