Pakistan budget FY26: GST on hybrid EVs increased from 8.5% to 18%

Pakistan government's strategy aims to lower average import tariff to below 6% by 2030, while boosting competition in domestic auto market
An undated image of Kia Sorento 1.6T HEV FWD. — Kia Pakistan
An undated image of Kia Sorento 1.6T HEV FWD. — Kia Pakistan

With the budget 2025-26 Pakistan now being presented, the federal govt has announced a major change for hybrid electric cars (HEVs), increasing the sales tax.

The Minister for Finance and Revenue Muhammad Aurangzeb announced on Tuesday, June 10, 2025, that the sales tax on HEVs is going up from 8.5% to 18%.

To note, this is a noticeable increase, particularly as compared to the past year, this tax stayed at a low of 8.5%.

That lower rate was generally seen as a way to help more people buy these fuel-efficient cars.

By the decision of the government, commuters were encouraged to have cleaner cars on the roads and reduce how much fuel the country imports.

Car Brand ModelEnginePrice 8.5% GST (Rs) Price 18% GST (Rs) 

Expected increase (Rs)

HavalH6 HEV 1.5l 11,749,000 12,777,7141,028,714

Jolion HEV 1.5l 9,295,00010,108,848813,848
ToyotaCorolla Cross 1.8 HEV 1.8l 8,999,0009,786,931787,931

Corolla Cross 1.8 HEV X 1.8l 9,449,00010,276,332827,332
HyundaiElantra Hybrid 1.6l 9,700,00010,549,309849,309

Tucson Hybrid Smart 1.6l 10,999,000 11,962,046963,046

Tucson Hybrid Signature 1.6l 11,999,00013,049,6041,050,604

Santa Fe Smart 1.6l 12,490,00013,583,594

1,093,594


Santa Fe Signature 1.6l 13,899,00015,115,9631,216,963
KiaSportage L HEV 1.6l 10,999,00011,962,046963,046

Kia Sorento 1.6T HEV FWD 1.6l 14,699,000 15,986,0091,287,009

Kia Sorento 1.6T HEV AWD 1.6l 15,999,00017,399,8341,400,834
MGHS PHEV 1.5l9,699,00010,548,221849,221

Notably, last year’s steady tax rate also made it simple for car dealers and importers to plan their business.

However, with the announcement of budget 2025-26 Pakistan, this new announcement changes things quite a bit. Doubling the sales tax to 18% has surprised many people.

To note, the government has not fully explained why they have made this sudden change. 

Notably, the government's strategy aims to lower the average import tariff to below 6% by 2030, while also boosting competition in the domestic auto market.