Breakdown of New Sales Tax Rates in Upcoming Auto Policy

Pakistan's proposed Auto Policy 2026-31 outlines a revised sales tax structure for battery electric vehicles, range-extended electric vehicles, plug-in hybrids, conventional hybrids, and petrol-powered vehicles.

Key points

• Suzuki Cultus Among Cars Projected to Secure Cheaper Under New Policy Oct 21, 2026 5: 03 pm.
• Toyota Yaris Could Obtain Cheaper Under New Automotive Policy Oct 21, 2026 5: 15 pm.
• Suzuki Alto Cost Anticipated to Drop Under New Auto Policy Oct 21, 2026 4: 53 pm.
• The proposed changes would additionally reduce the sales tax on ICE vehicles with engine capacities ranging from 1, 400cc to 2, 000cc from 25% to 18%.
• For PHEVs above 2, 000cc, the rate would fall from 25% to 9%.

In practice, the draft proposes different tax rates based on vehicle powertrain technology, with the aim of encouraging new energy vehicles while revising the tax treatment of conventional cars. Pakistan Intends Rs. 1.7 Billion Automotive Testing Institute. Up to 2, 000cc. Up to 1, 400cc. 1, 400 to 2, 000cc.

According to a comparison of existing and proposed rates in the draft policy, the sales tax on PHEVs with engine capacities of up to 2, 000cc would drop from 18% to 9%. For PHEVs above 2, 000cc, the rate would fall from 25% to 9%. Suzuki Cultus Among Cars Projected to Secure Cheaper Under New Policy.

For context, the proposed changes would additionally reduce the sales tax on ICE vehicles with engine capacities ranging from 1, 400cc to 2, 000cc from 25% to 18%. While vehicles above 2, 000cc would continue to face a 25% rate, nevertheless, the rate for ICE vehicles up to 1, 400cc would remain unchanged at 18%.

In contrast, REEVs would face a higher sales tax under the proposed policy. Their rate would growth from 1% to 6%, marking a five-percentage-point rise. Meanwhile, battery electric vehicles (BEVs) would retain their existing 1% sales tax rate.

For hybrid electric vehicles (HEVs), the draft proposes no change. The sales tax would remain at 18% for vehicles with engine capacities of up to 2, 000cc and 25% for those above 2, 000cc. Stay Connected with ProPakistani.

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In short, breakdown of New Sales Tax Rates in Upcoming Auto Policy is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.