• The government has removed tax exemptions on imported hybrid cars in the 2024–25 budget.
• These cars will now be taxed at the standard rate based on engine capacity and selling price.
• Withholding tax on regular cars has increased, raising the price of imported hybrid cars.

The government has removed tax exemptions on imported hybrid cars, as stated in the 2024-25 budget announcement.

These cars will now be taxed at the standard rate, like regular cars, based on engine capacity and selling price. This will significantly increase hybrid car prices in Pakistan, making them harder to sell.

The official budget documents state that tax exemptions on imported hybrid cars were removed because hybrid cars are now being produced locally. With the price difference between regular and hybrid cars decreasing, there is no longer a need for tax exemptions on imported hybrids.

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Withholding tax on regular cars has also increased, which will further raise the price of imported hybrid cars. This change affects cars of all engine sizes, from below 800 cc to above 2000 cc.

Additionally, the tax exemption on electric vehicles (EVs) has been removed, but this only applies to EVs costing more than $50,000.