The federal government has taken an important decision regarding locally produced hybrid electric vehicles, granting sales tax exemption to vehicles with engines of up to 2,000cc.

The Ministry of Finance has amended the sales tax rules concerning hybrid electric vehicles, under which locally produced hybrid vehicles with engines of up to 2,000cc will be included in the sales tax exemption.

The Ministry of Finance has also issued a notification regarding the exemption of hybrid vehicles from sales tax.

According to the notification, the new amendment relating to sales tax will take effect immediately.

New auto policy includes proposals for a phased reduction in duties on the import of hybrid vehicles.

Govt approves new five-year auto policy

Prime Minister Shehbaz Sharif has approved the new five-year auto policy, but before the policy can be implemented, it will have to go through the approval stages of the IMF and the federal cabinet.

According to the policy draft, the new auto policy is proposed to be implemented from 2026 to 2031, with proposals for a phased reduction in duties on the import of hybrid vehicles.

According to the document, a 20% reduction in taxes over five years has been proposed on the import of hybrid vehicles above 1,800cc.

Preparations are underway to reduce the duty on hybrid vehicles above 1,801cc from 50% to 30%.

Similarly, a proposal has been made to reduce the duty on 1,501cc to 1,800cc hybrid vehicles from 50% to 30%.

A proposal has also been made to reduce the duty on 851cc to 1,000cc and up to 800cc hybrid vehicles from 50% to 30%.

The policy draft proposes reducing the duty on hybrid trucks from 30% to 15%, while the duty on hybrid light commercial vehicles is proposed to be reduced from 60% to 30%.

Similarly, preparations are underway to reduce the duty on hybrid buses from 30% to 15%.

Overall, the new auto policy includes proposals for a phased reduction in duties on the import of hybrid vehicles.

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