Government Approves New Five-Year Auto Policy
Sanaullah Nagra (@) | September 10, 2026
The draft policy proposes further tax cuts for small electric vehicles and phased duty reductions on imported hybrid vehicles.
Key Points:
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Tax Cuts for Electric Vehicles: The policy recommends tax reductions for small electric vehicles and keeps the concessionary sales tax on parts for locally manufactured electric vehicles at 1%.
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Hybrid Vehicle Duties: Duties on imported hybrid vehicles will be reduced gradually:
- From 50% to 30% on hybrid vehicles.
- From 30% to 15% on hybrid trucks and buses.
- From 60% to 30% on hybrid light commercial vehicles.
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Focus on Technology Transfer and Employment: The Prime Minister, Shehbaz Sharif, emphasized the importance of technology transfer and increased employment opportunities for skilled Pakistanis.
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Discussions with IMF: The policy will be discussed with the International Monetary Fund in October.
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Business Community Involvement: The prime minister expressed gratitude to the business community for their valuable proposals during the budget-making process.
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Promoting Business Activity: The government is taking measures to promote business activity and improve the ease of doing business, including reducing energy costs.
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Trade Facilitation: The prime minister highlighted the establishment of the Trade Facilitation Board and the Special Investment Facilitation Council, emphasizing their role in promoting trade and providing a conducive environment for businesses.
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Regulatory Reforms: Steps are being taken to implement regulatory guillotine reforms to simplify rules, lower compliance costs, and facilitate business activities.
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Digitalization of FBR: Significant progress has been made in digitizing the Federal Board of Revenue, resulting in Rs800 billion in collections during the previous fiscal year.
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Macroeconomic Improvements: The country’s macroeconomic conditions have improved due to the government’s economic team efforts.
Microeconomic challenges remain, however, and the government is focusing on training manpower to align with industry needs.
