ISLAMABAD – Budget 2026–27 is around the corner, and expectations are building across Pakistan’s auto sector. After years of rising costs and heavy import duties, there is finally a sense that relief may be on the way.
The country’s auto sector could be headed for a major transformation as the federal government prepares a high-impact relief package under the upcoming budget and revised auto policy.
Authorities are considering lower import duties, a simplified tariff structure, and fresh incentives for new energy vehicles aimed at making cars more affordable and boosting industry growth.
The policy is expected to go beyond just electric vehicles, expanding support to hybrids and other new energy technologies, marking a broader push toward cleaner mobility in Pakistan.
Among major proposals under discussion is 5 percent customs duty on hybrid vehicle parts, designed to streamline the current tax system and remove complexity in pricing structures. Officials are also weighing plans to eliminate additional customs duties while gradually reducing regulatory duties under the National Tariff Policy framework.
Under proposed structure, auto parts may be taxed at around 5 percent, while completely built vehicles (CBUs) could face a 10 percent duty, reshaping import costs across the sector. For Completely Knocked Down (CKD) kits, a flexible duty range of 5 to 10 percent is also being considered depending on category.
Electric bikes, rickshaws, and EVs are likely to be given tax exemptions or major duty relief, aiming to accelerate the shift toward affordable and energy-efficient transport across the country.
Officials said the proposals are still under active review and will be finalized in the coming weeks after consultations with financial institutions and stakeholders. If approved, the package could mark one of the most significant turning points for Pakistan’s auto industry in years, potentially reshaping prices, imports, and the future of mobility in the country.
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