Karachi, April 17, 2025 — The Institute of Cost and Management Accountants of Pakistan (ICMAP) has urged the government to adopt a supportive taxation framework for Electric Vehicle (EV) manufacturers, as part of its tax proposals for the federal budget 2025-26.
Recognizing the immense potential of Pakistan’s emerging EV sector, ICMAP recommended a framework that balances revenue generation with sustainable industry growth. The institute has proposed a phased taxation model starting with a 10% to 15% tax on profits in the initial years of operation, gradually increasing to 20% to 25% over a five-year period.
According to ICMAP, this framework is designed to integrate EV manufacturers into the national tax net while avoiding the pitfalls of overburdening a nascent industry. The proposal emphasizes that a structured and predictable tax environment can help attract investment and allow companies to scale operations before facing higher tax obligations.
“The Electric Vehicle sector is a promising avenue for economic growth and environmental sustainability,” said a spokesperson for ICMAP. “Our proposed framework allows space for the industry to grow while ensuring long-term contribution to national revenues.”
The ICMAP estimates that, if implemented, this tax framework could help expand the national tax base significantly. By 2030, the EV sector could potentially contribute PKR 10–20 billion annually in tax revenue. Moreover, a stable fiscal environment would enhance foreign direct investment (FDI) in EV manufacturing, supporting local job creation and helping Pakistan reduce its carbon emissions.
The proposal aligns with the government’s green development goals and underscores ICMAP’s commitment to sustainable economic policies. The institute noted that the EV industry, if properly nurtured, could play a pivotal role in Pakistan’s future, providing economic, environmental, and employment benefits.
ICMAP concluded that a forward-looking framework is not just about tax revenue, but about enabling an entire ecosystem to thrive in a globally competitive market. The institute urged policymakers to adopt this phased approach in the upcoming budget, ensuring that growth is both inclusive and environmentally responsible.