In a statement issued on Saturday, FPCCI Executive Committee member Adeel Siddiqui said tax concessions on hybrid vehicles expired on June 30. As the new auto policy was not notified in time, the Federal Board of Revenue (FBR) restored the standard 25 per cent general sales tax on hybrid electric and plug-in hybrid vehicles.
He said the revised rate represented a significant increase from the previous preferential rates of 8.5pc for hybrid vehicles up to 1,800cc and 12.75pc for those above 1,800cc.
According to Mr Siddiqui, the sudden change had created confusion in the auto industry, with manufacturers temporarily halting production and stopping the issuance of invoices because of uncertainty over the applicable sales tax rate.
He called for the restoration of the previous tax concessions or, at minimum, a reduction of the rate to 18pc until the new policy was finalised.
Mr Siddiqui also urged the government to notify the Auto Policy 2026-31 without further delay, saying a clear policy framework was necessary to provide stability to the industry.
He stressed the need for a phased transition towards clean energy, with incentives linked to local manufacturing and technology transfer.
The FPCCI representative warned that the existing tax policy could slow Pakistan’s shift towards fuel-efficient vehicles, raise fuel import costs and undermine the automotive sector’s recovery.
He urged the government to take immediate measures to prevent further damage to the country’s auto industry and energy security.
