ISLAMABAD (Kashmir English): The federal government has prepared the final draft of the long-pending new Auto Policy 2026-2031 to promote investment in the local auto industry and increase vehicle exports and has sent it to the Prime Minister for approval.
Details that emerged after the final draft was made public have revealed that the policy includes important proposals for a significant reduction in the duty imposed on the import of various categories of hybrid vehicles on a phased basis.
According to the documents, this auto policy plans to significantly reduce the duty imposed on all hybrid vehicles with an engine capacity of 800 cc to more than 1800 cc over the next five years.
In this regard, preparations have been started to reduce the duty on hybrid vehicles above 1801 cc in a phased manner in the next 5 years to 30 percent, under which the tax on the import of vehicles of this category will be reduced by 20 percent in the next 5 years, while it has been recommended to reduce the duty on hybrid vehicles from 1501 to 1800 cc in a phased manner by 20 percent.
Reduction in duty rates on hybrid cars
According to the draft, a plan has been prepared to provide major concessions in duty for small hybrid vehicles as well. Under this plan, it has been proposed to reduce the duty imposed on hybrid vehicles of 851 to 1000 cc in a phased manner to 30 percent, while at the same time, it has been recommended to reduce the current rate of duty on hybrid vehicles up to 800 cc from 50 percent to 30 percent in a phased manner in the coming years.
Proposed cuts for commercial hybrid cars
The draft of the new auto policy is not limited to personal and general purpose vehicles only, but it also includes proposals for a drastic reduction in duty for commercial and heavy hybrid vehicles.
According to the documents, it has been proposed to reduce the duty on hybrid buses from 30 percent to 15 percent over the next 5 years.
The policy text further states that the duty imposed on hybrid trucks can also be reduced from 30 percent to 15 percent in the next 5 years, while proposals to reduce the duty imposed on the import of high-light commercial vehicles from 60 percent to 30 percent in the next 5 years have been made part of the draft.
