Islamabad, Pakistan, is preparing auto industry tax relief measures for the upcoming federal budget to support local manufacturing and reduce vehicle costs.
Under the National Tariff Policy, officials are considering abolishing additional customs duties and reducing regulatory duties for the auto sector.
A proposal to revise customs duties on CKD kits is also under review. Non-localised parts could face a 5% duty, while localised components may be taxed at 10% to encourage domestic production.
The government is also considering expanding Pakistan’s electric vehicle policy to cover all new energy vehicles. The revised framework would include battery-electric vehicles, plug-in hybrids, range-extended vehicles, and fuel-cell cars.
Local auto manufacturers may receive special concessions to assemble a limited number of electric bikes, rickshaws and cars.
The company could receive concessional duties on up to 100 vehicles under an incentive scheme proposed until June 30, 2027. Officials are considering preferential treatment for locally assembled electric vehicles over fully imported units.
The average tariff for domestically produced electric vehicles is proposed to remain below 6%.
The Pakistan Automotive Parts and Accessories Manufacturers Association has suggested exempting electric bikes, rickshaws and other vehicles from certain duties.
The association has proposed a 1% tax on battery-electric vehicles and a 9% tax on plug-in hybrids, range-extended vehicles, and conventional hybrids. Customs duties on CKD parts may also be extended until June 30, 2028.
