Islamabad (Commerce Desk) The International Monetary Fund (IMF) has reportedly rejected Pakistan’s request to maintain sales tax exemptions on hybrid and electric vehicles in the upcoming federal budget.
According to sources, the Ministry of Industries and Production is now considering increasing sales tax on hybrid and electric vehicles to as high as 18% in the next budget.
If approved, the move is expected to significantly increase the prices of hybrid and electric vehicles, potentially placing an additional financial burden on consumers.
The report states that around 45,000 vehicles were imported during the last fiscal year, while the figure is estimated to decline to around 40,000 in the current fiscal year.
Sources further indicate that in the fiscal year 2026–27 budget, not only hybrid and electric vehicles but also solar panels may face increased sales tax, with proposals suggesting a rise from 10% to 18%.
Officials say the reduction in tax exemptions and concessions aims to control the fiscal deficit, but it could directly impact the cost and adoption of environmentally friendly technologies.
Experts warn that if these proposals are approved, both vehicle prices and demand in the energy sector could be significantly affected.