ISLAMABAD: The final draft of the new Auto Policy 2026-2031 has been presented to Prime Minister Shehbaz Sharif, proposing phased reductions in import duties on hybrid vehicles and various commercial vehicles.
According to the draft, the new auto policy will remain in effect for five years and aims to promote investment, vehicle production and exports in Pakistan’s automotive sector.
The proposal recommends reducing the duty on hybrid vehicles up to 850cc and those between 850cc and 1,500cc from 50% to 30%.
For 1,501cc to 1,800cc hybrid vehicles, the duty is proposed to be gradually reduced to 20% over the next five years. A 20% reduction in taxes on hybrid vehicles above 1,800cc has also been proposed.
The draft also includes significant duty cuts for commercial vehicles. Duty on hybrid trucks could be reduced from 30% to 15%, while duty on hybrid buses is also proposed to fall from 30% to 15%.
In addition, the proposal recommends reducing the duty on high-roof commercial vehicles from 60% to 30%.
The government says incentives for hybrid and new-technology vehicles are aimed at developing the modern automotive industry, increasing local production and boosting exports.
The proposed policy will require approval from the prime minister and completion of the relevant government procedures before implementation. The proposals may therefore be revised during the approval process.
