Business Desk 
May 18, 2025
The auto sector in Pakistan, which includes the growing market for electric vehicles (EVs), is set to get a major boost.
The government has made an announcement that it will eliminate excess taxes and duties on raw materials employed in car production, including that of EVs.
Pakistan phases out extra taxes on automobiles
This decision is included in the new National Tariff Policy 2025–2030. The goal is to strengthen the local auto industry, make it more competitive, and better connect it with international markets.
However, these reforms are anticipated to lower manufacturing costs, encourage higher investments, and enhance car prices for buyers.
As per a recent IMF report, Pakistan will phase out additional sales and import taxes on components already locally produced.
Special duties under legislation such as the 5th Schedule of the Customs Act and SRO 655(I)/2006, which previously provided local car manufacturers special privileges, will also be abolished by the government.
Notably, regulations regarding EV components and materials will be revised and reformed to provide level playing fields for all businesses in the industry.
This is likely to spur the local EV industry and ensure level competition.
It was said that the revisions will be conducted step by step to allow business to adapt. By 2030, the same tax reforms will extend to other industries in Pakistan.
