{"id":3739,"date":"2026-10-23T10:38:10","date_gmt":"2026-10-23T10:38:10","guid":{"rendered":"https:\/\/wisewheels.com.pk\/blogs\/?p=3739"},"modified":"2026-10-23T10:38:10","modified_gmt":"2026-10-23T10:38:10","slug":"new-auto-policy-pakistan-best-time-to-buy-9-tax-rates","status":"publish","type":"post","link":"https:\/\/wisewheels.com.pk\/blogs\/new-auto-policy-pakistan-best-time-to-buy-9-tax-rates\/","title":{"rendered":"New Auto Policy Pakistan: Best Time to Buy? 9 Tax Rates"},"content":{"rendered":"

New auto policy Pakistan<\/strong> buyers are watching closely could bring tax relief to several vehicle categories. The proposed Auto Policy 2026\u201331 includes changes to sales tax on petrol, diesel, electric and hybrid vehicles, and Prime Minister Shehbaz Sharif endorsed the latest draft on October 20<\/strong>.<\/p>\n

However, the policy is not approved or implemented yet. It still needs further clearance, including discussions with the International Monetary Fund (IMF)<\/a>, so the proposed rates could change. More importantly, even if taxes fall, car makers are not required to cut their prices.<\/p>\n

If you are planning a purchase, read our latest car prices in Pakistan<\/a> update alongside this guide.<\/p>\n

New Auto Policy Pakistan: What Tax Changes Are Proposed?<\/strong><\/h2>\n

The draft proposes the following sales tax (GST) rates:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
Vehicle Category<\/strong><\/td>\nCurrent GST<\/strong><\/td>\nProposed GST<\/strong><\/td>\n<\/tr>\n
BEV (Electric)<\/td>\n1%<\/td>\n1%<\/td>\n<\/tr>\n
REEV (Range-Extended EV)<\/td>\n1%<\/td>\n6%<\/td>\n<\/tr>\n
PHEV up to 2,000cc<\/td>\n18%<\/td>\n9%<\/td>\n<\/tr>\n
PHEV above 2,000cc<\/td>\n25%<\/td>\n9%<\/td>\n<\/tr>\n
HEV up to 2,000cc<\/td>\n18%<\/td>\n18%<\/td>\n<\/tr>\n
HEV above 2,000cc<\/td>\n25%<\/td>\n25%<\/td>\n<\/tr>\n
Petrol\/Diesel up to 1,400cc<\/td>\n18%*<\/td>\n18%<\/td>\n<\/tr>\n
Petrol\/Diesel above 1,400cc to 2,000cc<\/td>\n25%<\/td>\n18%<\/td>\n<\/tr>\n
Petrol\/Diesel above 2,000cc<\/td>\n25%<\/td>\n25%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

*The current 25% GST on conventional cars also applies to qualifying vehicles priced at Rs 4 million or above. The draft does not say whether this Rs 4 million price condition will stay, so the real relief for petrol and diesel cars below 2,000cc is still uncertain.<\/p>\n

For imported vehicles, the draft proposes extending the same GST rates to imported and locally assembled new energy vehicles (NEVs). The final treatment of existing battery-capacity thresholds still needs clarification.<\/p>\n

Will Car Prices Drop Under the New Auto Policy Pakistan Has Proposed?<\/strong><\/h2>\n

Not necessarily. Buyers should keep three factors in mind.<\/p>\n

    \n
  1. The proposal is not final. <\/strong>The IMF previously objected to concessional NEV tax rates, so the government may have to revise the proposed figures.<\/li>\n
  2. Manufacturers may not pass on the relief. <\/strong>Some companies absorbed earlier tax increases instead of raising prices. If taxes now fall, they may keep some or all of the benefit to recover those costs. Others may cut prices to attract buyers, but that remains a commercial decision, subject to applicable pricing and tax laws.<\/li>\n
  3. Other taxes could offset the savings. <\/strong>The draft introduces an Automotive Development Levy of 2% on conventional passenger vehicles between 1,001cc and 2,000cc, and 10% on those above 2,000cc. On the positive side, it also proposes removing the existing 2.5% FED on cars up to 1,000cc, which could help small-car buyers.<\/li>\n<\/ol>\n

    Who Could Benefit From the New Auto Policy Pakistan Changes?<\/strong><\/h2>\n