PHEV and REEV Sales Tax Proposes To 9% and 6% in Pakistan

PHEV and REEV sales tax in Pakistan finally has a proposed number in the latest presentation of the revised auto policy. Plug-in hybrids are shown at 9%, while range-extended electric vehicles sit at 6%. These rates are not in force yet and still need approval from the IMF and several government bodies. Here is how the figures changed and what they could mean for buyers.

What the Presented Auto Policy Says About Plug-in Vehicle Taxes

How the Proposed Rates Changed

Pakistan Auto Policy 2026–31 has gone through many drafts, and the tax treatment of plug-in vehicles kept shifting with each one. The first blueprint suggested a 1% sales tax for both PHEVs and REEVs, placing them next to fully electric cars. In September, unconfirmed reports pointed to 12.5% for PHEVs and 8% for REEVs, which looked like a step back. The latest committee report, presented on October 20, lands in the middle. PHEV sales tax in Pakistan is now proposed at 9%, which is 3.5 percentage points lower than the September figure, while REEVs drop by 2 points to 6%. Battery electric vehicles still keep the lowest rate of 1%, so the structure now has three tiers, with BEVs first, REEVs second and PHEVs third. The proposal also says both types would get the reduced rate whether they arrive as fully built units or are assembled locally. Regular hybrids that cannot be plugged in are left out of this concession. For carmakers, this gives a clearer picture when choosing which models to import or build, though the numbers can still change before anything is notified.

Proposed Rates at a Glance

Vehicle Type	Earlier 2026 Proposal	September Unofficial Draft	October 20 Committee Report
Plug-in Hybrid Electric Vehicles (PHEVs)	1%	12.5%	9%
Range-Extended Electric Vehicles (REEVs)	1%	8%	6%
Battery Electric Vehicles (BEVs)	1%	Not specified	Not specified

Why the Rates Matter for Recent Models

The timing matters because buyers now have far more choices than a year ago. In the plug-in hybrid space, the list includes the Haval H6 PHEV, Jaecoo J7 PHEV, BYD Shark 6, Chery Tiggo 8 PHEV, Tank 500 PHEV, Haval H6 GT PHEV and Jetour T1 i-DM. On the range-extender side, the Forthing Friday and Deepal S05 came first, followed by the Changan Nevo Hunter pickup, iCAUR V27, XPeng L03 and ARCFOX T5. With so many models around, REEV sales tax in Pakistan is no longer a topic for a few test vehicles. It touches a growing part of the market. The difference between the two technologies is simple. A PHEV can use its petrol engine to drive the wheels along with the battery. In a REEV, electric motors turn the wheels and the petrol engine mostly charges the battery to extend range. The government appears to be giving the second design a slightly better deal, which may push brands to think harder about what they offer and assemble locally in the coming years.

What the New Rates Mean for Car Buyers

Will Prices Actually Drop?

Lower tax does not automatically mean cheaper cars. New EV tax rates in Pakistan will only change showroom prices if everything else stays the same, and that is rarely the case. Each model already has its own tax treatment, customs duty and other charges, and the final price also depends on what the manufacturer decides to charge. Some brands may pass the benefit on, while others may hold prices to protect margins. Until the policy is approved and the changes are officially notified, no price cut on any PHEV or REEV can be confirmed. If you are close to booking a car, ask the dealer in writing how a future tax change would affect your price.

Where the Approval Stands

The 9% and 6% figures are still proposals. Reports say the Prime Minister has cleared the draft, but it must still pass the IMF, then the ECC for economic and tariff review, then the Federal Cabinet, and finally Parliament. Earlier drafts stalled at the IMF stage, so that step remains the biggest question mark.