Pakistan’s luxury car and EV markets are expected to face higher prices from July 1 following new taxation measures announced in the federal budget for the upcoming fiscal year.
The revised tax structure is likely to increase the cost of several vehicle categories, including luxury petrol cars, hybrid vehicles, and electric cars.
Industry experts believe the changes could make vehicle ownership more expensive for consumers planning to purchase high-end models.
Among the most affected segments are locally assembled electric vehicles. Under the new proposals, the sales tax on these vehicles is expected to increase from 1% to 18%. This change could result in a price increase of up to 17%, making EVs significantly more expensive than before.
Imported electric vehicles may also become costlier. Vehicles equipped with smaller battery packs are expected to face revised tax rates, which could further increase their retail prices in the local market.
The new taxation policy is part of the government’s broader revenue measures for the next fiscal year. While officials aim to increase tax collection, the changes are expected to impact consumers and the automotive industry.
Automobile analysts say higher prices could affect demand, particularly in the premium vehicle segment. Buyers may delay purchasing decisions as they assess the impact of the revised taxes on overall vehicle costs.
The development comes at a time when Pakistan’s automobile sector has been showing signs of recovery, with improved sales and growing interest in electric mobility. Industry stakeholders are now closely monitoring how the market responds to the new budget measures.
If implemented as proposed, the new tax rates will take effect from July 1, leading to higher prices across several categories of luxury and electric vehicles.