In a significant shift in automotive policy, the Pakistani government has eliminated tax advantages for imported hybrid vehicles in its 2024-2025 budget. This decision is expected to substantially increase the prices of hybrid cars in the country, potentially impacting their sales and market share.
According to official budget documents, imported hybrid cars will now be subject to taxation similar to conventional vehicles, based on their price and engine size. The government justifies this move by citing the growth of local hybrid car production, which has reduced the need for incentives on imported models.
“The tax break for imported hybrid vehicles is no longer necessary,” a government spokesperson stated. “We now have domestic production capabilities, and the price gap between conventional and hybrid vehicles has narrowed significantly.”
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The decision comes as part of a broader adjustment in automotive taxation. The budget also includes an increase in withholding tax on conventional automobiles, affecting vehicles with engine capacities ranging from under 800cc to over 2000cc.
Industry analysts predict these changes will lead to a notable price hike for imported hybrid vehicles, making them less attractive to cost-conscious consumers. The move is seen as a push to support local manufacturing and reduce reliance on imports in the automotive sector.
As the new tax structure takes effect, consumers and car dealerships are bracing for potential market shifts. The long-term impact on Pakistan’s automotive landscape and environmental goals remains to be seen.
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