A proposal has been made to keep the national average tariff for locally manufactured vehicles below 6 percent.
The government is likely to reduce taxes on raw materials for locally manufactured vehicles in the upcoming federal budget for the fiscal year 2026-27.
In this regard, a proposal has been made to keep the national average tariff for locally manufactured vehicles below 6 percent.
According to sources, proposals have been prepared in the new budget and new auto policy, effective from July 1, to promote the local auto industry. There is also a proposal to expand the scope of the Electric Vehicle (EV) policy to all New Energy Vehicles.
Similarly, it has been proposed to include EVs, plug-in hybrid vehicles, and fuel cell vehicles in the concessional tariff regime. In addition, under the National Tariff Policy, there is also a proposal to abolish additional customs duty and reduce regulatory duty.
A proposal to provide preferential protection to locally assembled EV vehicles over imported completely built vehicles is also under consideration.
Sources say that there is a proposal to keep the national average tariff for locally manufactured vehicles below 6 percent, while the proposed concessional customs duty on CKD parts may remain in force until June 30, 2028.
The government is also considering a proposal to gradually shift auto sector incentives toward a normal regime.
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