Pakistan's tax breaks on electric vehicles could cost the government Rs150 billion every year. This warning comes from Abdul Rehman, former chairperson of the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM). He says the government may be giving away too much revenue for too few buyers.
Rehman based his estimate on two numbers. He expects yearly sales of New Energy Vehicles (NEVs) to reach 50,000 units. Each vehicle gets tax and duty relief worth about Rs3 million on average. Multiply the two, and the yearly cost to the government comes close to Rs150 billion.
Right now, NEVs get a flat 1 percent sales tax rate in Pakistan. Rehman says this is a generous deal. At the same time, he points out, the government is trying to raise more tax money from other sectors.
He compared this cost to another government budget item. The Higher Education Commission got about Rs35 billion for the 2025-26 fiscal year. The EV tax concession, he said, will end up costing more than four times that amount.
Rehman did not say Pakistan should drop support for electric vehicles. He said the shift to electric transport still matters. It can cut fuel imports and pollution, and it can help build a local EV industry.
