Government Ends Tax Exemption for Expensive Electric Vehicles in Budget 2025

According to the formal budget release, the government has proposed eliminating the tax deductions that electric cars worth above $50,000 already enjoy.

Initially, tax breaks were provided for imported electric vehicles to promote their use and importation into Pakistan. That will soon change, as EVs priced at more than $50,000 will now pay standard auto taxes. The top tier of electric vehicles, including the BMW i8 and Audi e-Tron/e-Tron GT, will be impacted by this. But since they aren't worth more than $50,000, less costly electric vehicles like the MG ZS EV, MG4 EV, Rinco Aria, etc., won't be impacted by this plan.

It won't significantly affect electric cars' appeal or sales, though, because the majority of them are initially far more costly than conventional vehicles.

Additionally, the government has suggested raising the withholding tax on non-electric vehicles. In general, this will result in higher automobile costs for the general public, who are already burdened by historically high rates of inflation.

Remember that these are only suggestions that haven't been accepted yet. Please take this with a grain of salt since they are subject to modification or cancelation.

Arifa Hussain

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