PM Shehbaz Approves Auto Policy, Rejects IMF’s Sales Tax Proposal on EVs

ISLAMABAD: Prime Minister Shehbaz Sharif has approved a new auto policy for the next five years, decisively rejecting the International Monetary Fund’s (IMF) proposal to impose an 18% sales tax on electric vehicles (EVs). This decision, announced on October 20, 2026, aims to bolster the country’s burgeoning electric vehicle market while addressing concerns over affordability and sustainability.

The Prime Minister emphasized the government’s commitment to promoting green technology and reducing carbon emissions. In a statement, he noted, “Our focus is on making electric vehicles accessible to all citizens, and imposing a sales tax would hinder this goal.” The policy is expected to encourage local manufacturing and investment in the electric vehicle sector, which has seen significant interest in recent years.

This policy shift is significant for Pakistan’s economy as it aligns with global trends towards sustainable transportation. By rejecting the IMF’s sales tax proposal, the government aims to stimulate growth in the auto sector, potentially creating jobs and reducing reliance on imported fossil fuels. Analysts suggest that this move could enhance Pakistan’s position in the global electric vehicle market.

Looking ahead, the government plans to hold consultations with industry stakeholders to refine the auto policy further. Upcoming meetings are expected to address concerns from motorcycle riders who feel overlooked in the current framework. The government is also set to engage with international partners to explore additional support for the electric vehicle initiative.