The federal government is planning to reduce duties and taxes on hybrid vehicles under the proposed Auto Policy 2026–31, according to reports on Tuesday.
The final draft of the policy has been sent to Prime Minister (PM) Shehbaz Sharif for review. If it gets approved, the policy will cover the next five years from 2026 to 2031.
When will the changes be made?
The draft also includes a gradual cut in duties on imported hybrid vehicles. The changes will be made in phases over the five-year period.
How have the cuts for hybrid cars been proposed?
For hybrid vehicles with engine sizes above 1,800cc, the government has proposed a 20 per cent cut in import taxes over five years.
The duty on hybrid vehicles above 1,801cc may also fall from 50 per cent to 30 per cent during this period.
For vehicles with engines between 1,501cc and 1,800cc, the duty could also be reduced from 50 per cent to 30 per cent in phases.
The same reduction has been proposed for hybrid vehicles with engine sizes between 851cc and 1,000cc.
For hybrid vehicles with engines up to 800cc, the duty is also proposed to drop from 50 per cent to 30 per cent over five years.
What are the proposed cuts for commercial vehicles?
The draft policy also includes lower duties for hybrid commercial vehicles.
The duty on hybrid trucks may be reduced from 30 per cent to 15 per cent over the next five years.
For hybrid light commercial vehicles, the government is considering a cut in duty from 60 per cent to 30 per cent.
The duty on hybrid buses may also be reduced from 30 per cent to 15 per cent during the same period.
The proposed changes are to encourage the use of hybrid and fuel-efficient vehicles.
The government also plans to gradually change the country’s vehicle import and tax system through the new policy.
