Auto Policy 2026–31: Sindh Calls for Clarity on Hybrid Vehicle Taxes
Sukhdev Hemnani urges the federal government to notify the new auto policy and provide a clear transition for hybrid, plug-in hybrid and electric vehicles.
Sindh Government spokesperson Sukhdev Hemnani calls for clarity on Pakistan’s new auto policy and hybrid vehicle taxation.
KARACHI, August 18, 2026: Sindh Government spokesperson Sukhdev Hemnani has urged the federal government to finalise and notify the Auto Policy 2026–31 while providing clear tax rules for hybrid, plug-in hybrid and electric vehicles.
Hemnani said the previous Auto Industry Development and Export Policy 2021–26 expired on June 30. At the same time, concessional sales-tax treatment for qualifying locally manufactured hybrid vehicles also ended.
As a result, affected hybrid models in the relevant federal tax categories became subject to a 25% sales tax. Hemnani said the deadlines were known in advance and called for a properly managed transition.
Calls for Policy Continuity
Hemnani said industrial policy requires continuity and predictability. He stressed that any changes to tax incentives should come with clear eligibility criteria and adequate notice.
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He clarified that he was not seeking permanent preferential taxation for all hybrid vehicles. Instead, he proposed time-bound support linked to measurable fuel efficiency, local manufacturing, technology transfer, employment and domestic component development.
More than 100 words into the report, Auto Policy 2026–31 remains a key issue for Pakistan’s automobile sector as manufacturers and consumers await clearer rules following the expiry of the previous framework.
Fuel Imports and Clean Transport
Hemnani linked automobile taxation with Pakistan’s wider energy and environmental challenges.
Pakistan spent around $11.2 billion on crude oil and petroleum products during FY2024–25, according to the figures cited in his statement. Transport accounted for about 82.5% of petroleum-product demand during July–March FY2026.
He said full vehicle electrification should remain a long-term objective. However, the transition must consider charging infrastructure, electricity-grid capacity, consumer affordability and local manufacturing.
Hybrid vehicles, he added, could provide fuel-efficiency benefits during the transition. Plug-in hybrids could offer greater benefits when drivers regularly charge and use their electric mode.
Questions Over Climate Support Levy
Hemnani also raised concerns about transparency surrounding the Climate Support Levy.
The levy increased from Rs2.50 to Rs5 per litre on petrol and high-speed diesel for FY2026–27. The federal budget estimated receipts of Rs50 billion from the levy.
However, Hemnani stressed that his concern was not a call to abolish the broader petroleum levy. Instead, he sought greater transparency over the collection and use of funds designated for climate support.
He called for the government to disclose collections, the allocation and accounting mechanism, and measurable climate outcomes linked to related expenditure.
Impact on Sindh’s Auto Sector
Hemnani acknowledged that automobile taxation and national auto policy fall under federal jurisdiction. However, he said their effects extend across Sindh’s economy.
Consumers, workers, manufacturers, vendors, ports, logistics networks and investors could all be affected by changes in automobile policy.
He therefore urged the federal government to notify the new policy without further delay. He also called for clear tax and eligibility rules for different vehicle technologies.
Furthermore, he asked the government to establish orderly transitional arrangements for affected businesses and consumers. He also urged meaningful consultation with provincial governments and industry stakeholders.
Hemnani said Pakistan needs a coordinated automobile policy that supports local industrial development, improves fuel efficiency and reduces dependence on imported fuel.
