Govt Withdraws New Sales Tax on Hybrid Cars in Pakistan

In the recent federal budget 2025–26, proposals were announced to increase sales taxes on certain cars that previously benefited from lower tax rates. Initially, it was announced that the locally manufactured smaller cars with 850cc engine would experience increase in sales taxes. However, where small cars are expected to face higher taxes, what about the cars with higher engine capacities? Considering this, here is another news regarding the sales tax on hybrid cars in Pakistan. Let’s have a look!

Sales Tax on Hybrid Cars in Pakistan

In the latest news, most of us were expecting that the sales tax on hybrid cars in Pakistan with a 1800cc engine is about to increase from 12.5% to 18%.

But the federal government had decided to cut-off this expected increase in the sales tax on Hybrid cars in Pakistan and keep it the same as 12.5%. It is also announced that the increase in the hybrid cars in Pakistan is not expected before June 2026, as per the recent auto policy in Pakistan.

In addition, you also need to know that there is no confirmed announcement yet from federal government related to the taxes on small cars with 850cc engines, such as the Suzuki Alto and Every. Does this mean that the federal government is likely to implement this sales tax on the ride of middle class people and make an exception for the high-income people? Well, we can not say anything about it yet till any confirmation.

Conclusion

To sum up, people planning to buy hybrid cars in Pakistan this year are all safe from the sales tax on hybrid cars in Pakistan. Moreover, sales tax on hybrid cars in Pakistan is rejected for now, but there are potential chances of increase in the next year’s budget. However, it is the right time for you to buy a hybrid car in Pakistan.

Also read: Pakistan Federal Budget 2025-26: Key Highlights & New Taxes