IMF Reportedly Seeks End to EV Tax Concessions in Pakistan

The International Monetary Fund (IMF) has reportedly asked Pakistan to withdraw the concessional sales tax currently available on electric vehicles, a move that could significantly increase EV prices if accepted by the government.

According to various news sources, Pakistan and the IMF are currently discussing the country’s new auto policy, with the draft being revised in light of concerns raised by the lender.

Recently, there have been claims that the IMF has objected to the concessional sales tax on EVs and has called for the standard tax rate to be applied instead. If the proposal is accepted, the sales tax on electric vehicles could increase from 1% to 18%.

For context, this means that the tax on a car valued at Rs 10 million could rise from around Rs 100,000 to Rs 1.8 million under the higher rate.

That would represent a substantial increase in the tax burden and could directly affect the final prices of EVs sold in Pakistan.

The proposed change may not be limited to vehicles. According to reports, the sales tax on EV charging stations could also increase from 1% to 18% if the IMF’s objections are incorporated into the new policy.

Such a move could raise the cost of expanding Pakistan’s charging infrastructure at a time when several manufacturers are introducing new EVs in the local market.

The IMF has reportedly argued that electric vehicles are currently positioned more as a luxury product than a necessity for lower-income consumers, and therefore should not continue receiving preferential tax treatment.

This position could create another major point of contention in Pakistan’s upcoming auto policy, particularly as the government has been considering incentives for EVs and other new-energy vehicles.

Sources cited in the report said the revised draft of the auto policy will soon be presented to Prime Minister Shehbaz Sharif, who is expected to be briefed on the IMF’s objections.

For now, the proposed increase remains under discussion and has not yet been formally implemented.

If the concessional rate is withdrawn, however, it could materially change the pricing structure of EVs in Pakistan and potentially slow their adoption, particularly in segments where price remains one of the biggest barriers for buyers.

Stay tuned to PakWheels for further updates on Pakistan’s new auto policy, EV taxation, and any changes announced by the government.