ISLAMABAD: The federal government has reduced the sales tax on locally manufactured hybrid electric vehicles (HEVs) in a move aimed at helping revive sales of hybrid cars in Pakistan.
The Ministry of Finance has issued a notification announcing the reduction, with the revised sales tax rate taking effect from September 13, 2026.
Under the notification, SRO 1525(I)/2026, the sales tax on locally manufactured hybrid electric vehicles has been reduced from 25% to 18%.
The notification was issued under Section 3(2)(b) of the Sales Tax Act, 1990.
Officials said the decision was taken to address difficulties surrounding the sale of locally manufactured hybrid electric vehicles ahead of the implementation of the country’s new auto policy.
The tax reduction is meant to solve any sales-related problems faced by the local hybrid cars and make things easier for the automobile industry in light of the new policy.
This decision comes at a time when there is increased effort to promote locally made cars and the use of fuel-efficient car technology in Pakistan.
