Govt Increases Prices of All Small and Electric Cars

The federal government has introduced a flat 18% sales tax on all petrol and diesel vehicles, including hybrid and electric models, to simplify Pakistan’s vehicle taxation framework.

Under the current system, some vehicle categories like cars below 850cc engines and electric/hybrid vehicles, are taxed at much lower rates, creating inconsistencies across the board. The proposed reform seeks to standardize the rate, removing disparities and creating a level playing field for all types of conventional and hybrid vehicles.

The measure is designed to improve compliance in the tax collection process. By replacing a fragmented structure with a unified rate, the government aims to reduce confusion among both consumers and automobile manufacturers.

Authorities believe that a uniform tax rate will make it easier for manufacturers to manage their pricing strategies. The move could also simplify administrative processes within the Federal Board of Revenue.