ISLAMABAD – June 10, 2025: In a move aimed at streamlining the nation’s vehicle taxation framework, the federal government has announced the imposition of a flat 18% sales tax on all petrol and diesel vehicles, a measure that also encompasses hybrid models.
This new policy addresses the inconsistencies present in the current system, where various vehicle categories are subject to differing sales tax rates. The proposed reform seeks to standardize these rates, thereby eliminating disparities and fostering a more equitable playing field across all types of conventional and hybrid vehicles available in the market.
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The government’s primary objective behind this measure is to enhance compliance within the tax collection process. By transitioning from a fragmented tax structure to a unified rate, authorities aim to reduce confusion for both consumers and automobile manufacturers. It is anticipated that a uniform tax rate will simplify total cost calculations for car buyers and aid manufacturers in managing their pricing strategies more effectively. Furthermore, officials believe this move will streamline administrative procedures within the Federal Board of Revenue, contributing to greater efficiency in tax management.
