The Federal Board of Revenue (FBR) is reportedly facing pressure over Pakistan’s proposed Auto Policy 2026–31. Some industry players are allegedly trying to weaken the policy and delay the country’s transition towards new energy vehicles (NEVs).
Sources familiar with the matter told ProPakistani that certain industry groups are running a coordinated campaign. Their efforts reportedly aim to increase sales tax on electric and other new energy vehicles.
The proposed changes could affect incentives designed to encourage electric mobility across Pakistan. These incentives are considered an important part of the government’s strategy to promote cleaner transportation.
According to the sources, some industry players are approaching both the FBR and the International Monetary Fund (IMF). They are reportedly seeking changes that could increase the tax burden on NEVs.
The campaign has raised concerns about the future of Pakistan’s electric vehicle industry. Higher taxes could make these vehicles more expensive for consumers and discourage potential buyers.
Auto Policy 2026–31 Proposes Different Tax Rates
The proposed Auto Policy 2026–31 introduces separate tax rates for different categories of new energy vehicles. These include battery electric vehicles, range-extended electric vehicles, and plug-in hybrid vehicles.
The government has proposed a 6 percent sales tax on range-extended vehicles. Meanwhile, plug-in hybrid vehicles would face a proposed sales tax rate of 9 percent.
These rates are lower than the general 18 percent sales tax previously suggested by the IMF. The government had already rejected the proposal to impose an across-the-board 18 percent tax on electric vehicles.
The differentiated tax structure aims to support different technologies. It also seeks to make cleaner transportation options more accessible to Pakistani consumers.
Proposed Incentives for Electric Vehicle Buyers
The policy includes additional measures to support the country’s electric vehicle market. One major proposal involves reducing customs duties on eligible imported electric vehicles.
The government also plans to expand financing opportunities for people interested in purchasing these vehicles. Easier financing could help consumers manage the initial cost of electric mobility.
These measures are intended to encourage investment and increase electric vehicle adoption. They could also support the development of Pakistan’s emerging NEV market.
Industry Pressure Raises Concerns Over EV Transition
Sources have warned that reversing the proposed incentives could weaken Pakistan’s electric vehicle transition. Higher taxes may reduce the financial benefits currently planned for consumers.
The reported pressure on the FBR and IMF could therefore influence the final policy framework. Any major changes might affect manufacturers, importers, investors, and potential buyers.
Pakistan’s Auto Policy 2026–31 is expected to play an important role in shaping the country’s automotive industry. Its final tax structure will determine how effectively the government can encourage new energy vehicles.
In other related news also read FBR Gets December Deadline for Automated Tax Monitoring
However, the reported industry campaign and its potential impact remain matters of concern. The final outcome will depend on the government’s decisions regarding taxation and electric vehicle incentives.
