Lucky Group Chairman urges fair auto policy taxes

June 22, 2026 (MLN): Muhammad Ali Tabba, CEO of Lucky Cement and Chairman of Lucky Group, has urged policymakers to adopt a pragmatic approach in Pakistan's upcoming auto policy.

He warned against sales tax and Federal Excise Duty (FED) cross-subsidization across vehicle technologies including Internal Combustion Engine (ICE), Plug-in Hybrid Electric Vehicle (PHEV), Electric Vehicle (EV), and Range-Extended Electric Vehicle (REEV) segments.

Muhammad Ali Tabba, sharing his views on LinkedIn, said such cross-subsidisation distorts market dynamics and breeds uncompetitiveness, drawing a parallel with the gas and power sectors where similar interventions had previously caused structural inefficiencies.

He stressed that sustainable growth in the auto sector requires a level playing field rather than artificial advantages extended to any particular technology.

The remarks come as the government moves to finalise a new five-year Auto Industry Development Policy to replace the existing framework expiring June 30.

The proposed policy envisages sweeping reductions in import duties across engine categories with cumulative duty and tax incidence on vehicles of 1,800cc and above to be nearly halved to 74% from as high as 156%, while levies on cars between 1,000cc and 1,500cc are proposed to decline to 52% from 76%.

The framework, which was discussed at a recent National Assembly Standing Committee on Finance meeting, also covers the EV taxation landscape.

Lawmakers raised concerns over proposed levies on electric vehicles priced above Rs20 million and flagged the absence of adequate charging infrastructure as a prerequisite for any meaningful shift toward electric mobility.

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