ISLAMABAD (Kashmir English): Electric vehicle buyers in Pakistan could face a major increase in sales taxes as the government considers ending the current sales tax concession on EVs.
According to sources, sales tax on electric vehicles may be increased from 1% to 18% under a revised auto policy being prepared in light of objections raised by the International Monetary Fund (IMF).
If the proposal is approved, the tax on an electric vehicle worth Rs10 million could rise from around Rs100,000 to Rs1.8 million. Pakistan and the IMF are currently holding talks related to the loan programme, while work is underway on a new draft auto policy.
Sources said the IMF has called for the reduced sales tax rate on electric vehicles to be withdrawn, arguing that EVs are luxury items and are not a basic necessity for lower-income consumers.
The government is also considering increasing sales tax on electric vehicle charging stations from 1% to 18%.
The proposed changes could significantly increase the cost of owning and using electric vehicles, putting additional pressure on consumers already facing high vehicle prices.
Sources added that the revised auto policy, including the IMF’s concerns, will soon be presented to Prime Minister Shehbaz Sharif for review and final approval.
