Pakistan will consult the International Monetary Fund (IMF) before finalizing tax-related measures in its upcoming auto policy, as the lender has opposed reducing the sales tax on 800cc vehicles from 18 percent to 12.5 percent, sources told ProPakistani.
Prime Minister Shehbaz Sharif has directed officials to prepare an investor-friendly auto policy aimed at attracting fresh investment and expanding Pakistan’s automotive industry.
The policy will focus on increasing investment, boosting local manufacturing, and creating new employment opportunities across the sector.
Sources said the new framework will also align locally manufactured vehicles with international safety standards to improve quality and competitiveness.
The government is expected to discuss proposed tax incentives and exemptions with the IMF before giving final approval to the policy.
Sources added that the government is considering imposing a carbon tax on gasoline-powered and hybrid vehicle engines as part of its broader environmental and climate objectives.
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