Next Budget May Bring Cheaper Cars to Pakistan as Govt Plans Major Tax and Duty Cuts
Introduction:
Pakistan’s federal government is taking concrete steps to bring relief to consumers and the automotive industry alike. As part of the upcoming federal budget and a revised auto policy, authorities are considering significant reductions in import duties, customs tariffs, and tax incentives — measures that could directly lower the cost of vehicles across multiple categories, including hybrid and electric vehicles (EVs).
Broader Coverage: Beyond Electric — Hybrids Included
The proposed auto policy goes beyond conventional battery-powered electric vehicles. The government is looking to extend benefits to a wider range of New Energy Vehicles (NEVs), including hybrid vehicles. As part of this initiative, a flat 5% customs duty on hybrid vehicle parts is under consideration, aimed at simplifying and streamlining Pakistan’s existing tariff structure.
Abolishing Additional Duties Under National Tariff Policy
According to official policy documents, the government plans to eliminate additional customs duties while progressively reducing regulatory duties in line with the National Tariff Policy (NTP) framework. This move is expected to ease the financial burden on both automotive manufacturers and end consumers.
Key proposed duty structures include:
- Auto parts: Customs duty may be fixed at 5%
- Assembled/CBU vehicles: Duty likely set at 10%
- CKD (Completely Knocked Down) kits: Duty expected between 5% and 10%, varying by category
Electric Bikes, Rickshaws, and EVs to Get Duty Exemptions
In a major push toward sustainable and energy-efficient transportation, electric bikes, electric rickshaws, and electric vehicles (EVs) are expected to receive exemptions from certain duty requirements. These exemptions are designed to accelerate the adoption of clean mobility solutions and support Pakistan’s broader energy transition goals.
What Comes Next?
The proposals are currently under active review by relevant authorities. Final decisions are expected following consultations with lending institutions and key stakeholders in the coming weeks. The outcome of these deliberations will shape the direction of Pakistan’s automotive sector for years to come.
Why This Matters for Pakistani Car Buyers
If approved, these measures could:
- Lower vehicle prices across multiple segments
- Encourage local assembly of hybrid and electric vehicles
- Reduce dependence on expensive fully-built imported units
- Accelerate EV adoption through targeted duty relief
- Align Pakistan with regional and global automotive trends
