Hybrid Car Sales Tax in Pakistan 2026: 25%, 18% and What Is Still Pending

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Hybrid cars in Pakistan went from an 8.5% sales tax to 25% on 1 July 2026, and a 13 September notification cut the rate to 18% for some locally made models. This guide sets out the timeline, who the lower rate covers, what reports disagree on, and what to ask a dealer before you buy.

Last checked: 14 November 2026. Tax notifications and the new auto policy can change these rates, so confirm the rate on your invoice before you pay. This page is general information, not tax or financial advice.

The timeline

  • Until 30 June 2026: locally made hybrid electric vehicles paid a reduced sales tax. Reports give the rate as 8.5%, and one report says 12.75% for engines of 1801cc to 2500cc.
  • 1 July 2026: the concession expired and was not extended in the Finance Act 2026. Hybrid vehicles moved into Schedule II of S.R.O. 297(I)/2023, and the sales tax on the import and local supply of hybrid cars became 25%.
  • 13 September 2026: the Finance Division issued S.R.O. 1525(I)/2026, with immediate effect. It adds a proviso saying Table II does not apply to locally manufactured hybrid electric vehicles with an engine capacity up to 2000cc. News reports describe the result as a cut from 25% to 18%.

Who the lower rate covers

By the wording of the notification, the exclusion covers locally manufactured hybrid electric vehicles up to 2000cc. Daily Pakistan notes that the cut is limited to qualifying locally assembled vehicles.

We found no report that imported hybrids, hybrids above 2000cc or plug-in hybrids received the same cut. Those vehicles are not named in the proviso, so they appear to stay under the 25% provision. Confirm this with the dealer or the Federal Board of Revenue before you rely on it.

What reports disagree on

  • The July rate. Most reports say the tax went to 25% on 1 July. ARY News reported on 10 July that locally assembled hybrids went from 8.5% to 18%, and plug-in hybrids from 1% to 18%. The notification wording and the September reports point to 25% before the cut.
  • Plug-in hybrids under the auto policy. The proposed Auto Policy 2026-31 sets out different treatment for hybrids and plug-in hybrids. ARY reported a 9% rate for plug-in hybrids in October. PakWheels described plug-in hybrids falling to 1% and conventional hybrids paying 9%. Neither version has been confirmed as final.
  • Policy status. Gulf News noted that the policy had not completed formal approval and that several proposed concessions need clearance from the International Monetary Fund. Our Auto Policy 2026-31 guide tracks what has been announced and what is still unconfirmed.

What it means if you are buying a hybrid

  1. Ask the dealer which sales tax rate is on your invoice, and whether the vehicle is locally manufactured or imported.
  2. Ask for the total price and the delivery date in writing. Prices changed after the cut and may change again, and we do not list any model’s price here.
  3. If a new policy or notification arrives before delivery, ask what happens to the price you were quoted.
  4. If you are financing, ask your bank which limits apply today, and see our SBP policy rate guide for how the policy rate reaches car loans.

To see what an instalment could look like, use our car installment calculator, and test your budget with the vehicle affordability calculator.

FAQs

What is the sales tax on hybrid cars in Pakistan now?

Reports say 25% under the general provision, and 18% for locally manufactured hybrid electric vehicles up to 2000cc since 13 September 2026. Confirm the rate on your invoice.

Does the 18% rate apply to imported hybrids?

We found no report that it does. The notification refers to locally manufactured vehicles.

Why did hybrid prices go up in July 2026?

The reduced sales tax expired on 30 June 2026 and was not extended, so hybrids moved to the 25% rate from 1 July.

Will the new auto policy change hybrid tax again?

It may. The proposals differ between reports, and some need IMF clearance, so treat them as unconfirmed.

Should I wait before buying a hybrid?

We cannot tell you that. Ask for the tax rate and price in writing, and work out what you can afford under different rates.

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