Pakistani Hybrid Car Buyers Face Price Hike As Tax Relief Expires

The expiration of tax relief for local hybrid cars in Pakistan has led to a significant increase in prices, leaving many buyers with a tough decision to make. As of June 30, 2026, the General Sales Tax (GST) relief for hybrid cars, which was introduced in 2021, came to an end, allowing auto companies to revise their prices.

Background & Context

The Pakistani government introduced the Sales Tax Act of 1990, which exempted hybrid and other new energy vehicles from sales tax. In 2021, the government amended the act to provide a GST relief of 8.5% for hybrid cars up to 1800 cc and 12.75% for those between 1800 and 2500 cc. However, with the expiration of this relief, the government is expected to revisit the tax structure for these vehicles.

Experts say that the government may reintroduce the GST rates of 18% for cars up to 1800 cc and 25% for those above 1800 cc, which were in place before the relief was introduced. This move is expected to have a significant impact on the market, particularly for consumers who had been considering purchasing hybrid cars.

Key Details

Toyota Pakistan, one of the leading auto companies in the country, has increased the prices of its hybrid car, the Corolla Cross, by approximately 14 million rupees. The new price of the car is now over 1 crore rupees. However, the company has maintained the prices of its petrol variants, with the base model priced at around 73 million rupees and the high-grade variant at around 80 million rupees.

A spokesperson for Toyota Pakistan stated that the increase in prices is only for hybrid variants and not for petrol models. The company has also clarified that the prices of hybrid cars will continue to rise as the GST relief has come to an end.

According to a report by Topline Securities, a financial company, the prices of local hybrid cars are expected to increase significantly after the expiration of the GST relief. The report estimates that the prices of hybrid cars could increase by 10-20 million rupees, depending on the model and features.

What Experts Say

Auto industry expert Muhammad Faisal Shah Khattak says that the increase in prices will have a significant impact on the market, particularly for consumers who had been considering purchasing hybrid cars. He notes that the prices of imported hybrid cars, which are already high, will become more competitive compared to local hybrid cars.

Khatab adds that the increase in prices will also affect the demand for hybrid cars, which has been growing rapidly in recent years. He expects that the prices of imported hybrid cars will become more attractive to consumers, which could lead to a decline in demand for local hybrid cars.

Another auto industry expert, Mashood Khan, notes that the government is expected to introduce a new auto policy soon, which will outline the tax structure for hybrid and electric vehicles. He adds that the new policy may include a 15% sales tax on auto parts, which could have a significant impact on the industry.

Key Takeaways

• The GST relief for local hybrid cars in Pakistan has expired, leading to a significant increase in prices.
• The prices of Toyota Pakistan's hybrid car, the Corolla Cross, have increased by approximately 14 million rupees.
• The prices of hybrid cars are expected to increase by 10-20 million rupees, depending on the model and features.
• The increase in prices will have a significant impact on the market, particularly for consumers who had been considering purchasing hybrid cars.
• The government is expected to introduce a new auto policy soon, which will outline the tax structure for hybrid and electric vehicles.

What This Means For You

If you're in the market for a hybrid car, you may want to consider purchasing an imported model, which could be more affordable compared to local hybrid cars. However, it's essential to research and compare prices before making a decision.

Additionally, the increase in prices of hybrid cars may lead to a decline in demand for local hybrid cars, which could have a negative impact on the auto industry. As a consumer, it's essential to be aware of the market trends and make informed decisions when purchasing a car.

In conclusion, the expiration of the GST relief for local hybrid cars in Pakistan has led to a significant increase in prices, which will have a significant impact on the market. As a consumer, it's essential to be aware of the market trends and make informed decisions when purchasing a car.