FPCCI Demands Rollback Of Hybrid Car Tax From 25% To 8.5%. Tax Concessions Expired June 30 Without New Auto Policy. FBR Restores 25% GST. Automakers Stop Issuing Invoices. FPCCI’s Adeel Siddiqui Calls Policy A “Self-Inflicted Wound” And Warns Of Energy Security Risk
According to Dawn, the Federation of Pakistan Chambers of Commerce and Industry has demanded an immediate rollback of sales tax on hybrid vehicles, which jumped from 8.5 per cent to 25 per cent when preferential tax concessions expired on June 30 without a replacement auto policy being notified in time. The FBR consequently restored the general sales tax rate, tripling the effective burden on consumers overnight.
FPCCI Executive Committee member Adeel Siddiqui said the auto industry was in chaos; automakers had temporarily halted production and stopped issuing invoices because they could not determine which sales tax rate applied. He said the production halt was affecting thousands of factory workers, vendors and transporters, causing job and wage losses across the supply chain.
Siddiqui warned that the policy carried serious energy security implications. Pakistan imports roughly 80 per cent of its petroleum products, making transport electrification a matter of national priority. By making hybrids more expensive, the government was actively discouraging fuel-efficient vehicles and extending dependence on imported fuel.
He demanded either an immediate rollback of the 25 per cent rate or a reduction to 18 per cent pending finalisation of Auto Policy 2026–31, which he called on the government to notify without further delay. He described current policy as “a self-inflicted wound” that would slow Pakistan’s transition to fuel-efficient vehicles and damage a recovering auto sector.
Pakistan imports 80% of its fuel. The government just made fuel-efficient cars more expensive. That is the definition of contradictory policy.
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