Govt to Impose Up to 25% Sales Tax on Imported EVs in Budget 2026-27
Pakistan is likely to raise sales tax on imported EVs to as much as 25% in the next budget. Local EV tax breaks are set to expire on June 30, 2026.
Intelligence analysis by GPT-5.4 Mini
The report says the federal government is preparing a sharper tax regime for imported electric vehicles while keeping hybrid taxes unchanged. It also says existing EV concessions for local assembly and certain imported parts will expire or be extended only until June 30, 2026.
Pakistan may make imported electric cars more expensive by adding more tax, while still giving some help to local EV makers. It is like charging more for a ready-made toy but giving a discount on the parts to build it at home.
Analysis
What the report says
ProPakistani reports that the government is likely to impose up to 25% sales tax on the import of electric vehicles in the upcoming Budget 2026-27. The same report says hybrid vehicle tax rates are expected to stay unchanged in the next fiscal year.
What happens to current concessions
Several EV-related sales tax exemptions are due to end on June 30, 2026. Under the current setup, the 1% sales tax on locally manufactured or assembled four-wheeler EVs applies until that date, including eligible small cars, SUVs and light commercial vehicles within the stated battery-size limits.
The article also says the exemption on importing completely knocked down kits for EVs by local manufacturers will lapse on June 30, 2026. At present, that concession covers small cars and SUVs with battery capacities of up to 50 kWh, and light commercial vehicles with batteries up to 150 kWh.
Policy and legislative context
The Senate Standing Committee on Finance has already approved the Customs (Amendment) Bill, 2026, which is meant to implement the financial provisions of the Automotive Industry Development and Export Policy 2021-26. According to the report, the committee backed the bill unanimously after deliberations.
The government has also proposed extending customs duty concessions on EV parts and components until June 30, 2026. The article says the aim is to support green transport and encourage local EV manufacturing in Pakistan. It notes that earlier concessions under the 2020 EV policy and later AIDEP framework were built into the Customs Act, and that the latest amendment is meant to align those concessions with the Fifth Schedule of the law.
The bill also extends customs duty concessions on completely built electric vehicles until June 30, 2026, but only up to 10 units of the same variant for local assembly or manufacturing, with a cap of 200 units for the two- and three-wheeler segment.
Key points
- The government is likely to impose up to 25% sales tax on imported EVs in Budget 2026-27.
- Tax rates on hybrid vehicles are expected to remain unchanged next fiscal year.
- Current EV tax exemptions and concessions are set to expire on June 30, 2026.
- The Senate finance committee approved the Customs (Amendment) Bill, 2026, linked to AIDEP 2021-26.
- The policy aims to support green transport and encourage local EV manufacturing.
If the policy works as intended, it could push more EV assembly and parts production into Pakistan. The report also says the duty concessions on EV parts are meant to support green transport, which could help keep the local EV market moving.
Higher taxes on imported EVs could make them more expensive for buyers and slow adoption in the short term. If local manufacturing does not scale quickly, the market could face fewer choices and higher prices before domestic supply catches up.
