The Ministry of Industries and Production has raised objections over the proposed hike in taxes on hybrid electric vehicles in the budget 2024-25, terming it a violation of export and auto industry development policies.
In a letter written to the Finance Division and the Federal Board of Revenue, the ministry said the sales tax has been hiked from 8.5% to 25%, which directly contradicts the commitment made under the Auto Industry Development and Export Policy 2021-26.
It said AIDEP was formulated to promote new, fuel efficient and environment friendly technologies.
“Sales tax is set on electric vehicles below 50KWH Battery at 1% and on hybrid electric vehicles at 8.5%, which is 50% of the prevailing rate,” the letter said adding that the policy aimed to ensure the faster adoption of these technologies.
