# Pakistan electric and hybrid vehicle tax policies

> Live situation record from CLSTR: https://clstr.news/situations/pakistan-electric-and-hybrid-vehicle-tax-policies
> Updated: 2026-09-08T12:18:05.000Z. Sources: 6. Developments: 2.

In the Sindh province, the cabinet approved a two-year extension of tax and registration incentives for electric vehicles (EVs), effective from May 30, 2026, through May 29, 2028. The package maintains low registration fees and annual motor vehicle taxes for non-commercial owners, while applying a luxury tax to larger vehicles with capacities of 2,000cc or above. Chief Minister Syed Murad Ali Shah noted the policy is intended to reduce fuel import dependence, lower carbon emissions, and mitigate urban air pollution.

Expanding on these efforts at a national level, the Pakistani government has prepared a draft of the Auto Mobile and Auto Parts Manufacturing Policy 2026-2031. This draft has been submitted to the Prime Minister and the International Monetary Fund (IMF) with the goal of integrating the domestic auto industry into the global supply chain.

The proposed national policy includes significant tax reductions for EVs, such as limiting sales tax to 1% and eliminating federal excise duty, capital value tax, and withholding tax. To improve affordability, the draft suggests increasing the financing limit for New Energy Vehicles from PKR 3 million to PKR 10 million and extending loan tenures from three to five years.

For hybrid vehicles, the policy proposes a phased reduction in import duties over five years. For models above 1800cc, duties could drop from 50% to 30%, with similar reductions planned for smaller hybrid models, trucks, commercial vehicles, and buses. The overarching objective is to reduce dependence on imported petroleum, lower mobility costs, and encourage local manufacturing.

## Timeline

### 2026-09-08: Pakistan proposes new auto policy to boost EV and hybrid vehicle adoption

Pakistan has drafted a new auto policy for 2026-2031 aimed at promoting electric and hybrid vehicles through significant tax cuts, increased financing limits, and longer loan tenures.

5 sources. https://clstr.news/cluster/pakistan-proposes-new-auto-policy-to-reduce-ev-and-hybrid-vehicle-taxes

### 2026-09-01: Sindh extends electric vehicle tax incentives until 2028

The Sindh government has extended tax and registration incentives for non-commercial electric vehicles and motorcycles until May 29, 2028, to promote cleaner transport and reduce fuel imports.

2 sources. https://clstr.news/cluster/sindh-extends-electric-vehicle-tax-incentives-until-2028

---
Cite as: Pakistan electric and hybrid vehicle tax policies. CLSTR, https://clstr.news/situations/pakistan-electric-and-hybrid-vehicle-tax-policies