Major duty concessions proposed for electric vehicle imports

The government has proposed sweeping tax and duty concessions on electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs) and charging infrastructure in the national budget FY2026–27, while seeking to raise taxes on certain fossil-fuel-powered vehicles to encourage greener transport.

According to proposals prepared by the National Board of Revenue (NBR), the current overall tax burden on imported electric vehicles, which stands at around 93%, would be significantly reduced. For EVs valued at up to $25,000, the total tax burden would fall to 64%, while vehicles worth up to $50,000 would face an 80% tax burden.

The budget also proposes a full exemption from all duties and taxes on imported electric buses used for transporting students at educational institutions. Tax concessions for other electric buses and trucks, excluding VAT, would be extended until 30 June, 2030.

New tax incentives have also been proposed for imported plug-in hybrid electric vehicles. Supplementary duties on PHEVs with engine capacities of up to 2,000cc would be reduced, while regulatory duties on new PHEVs of up to 1,800cc would be fully withdrawn.

As a result, the total tax burden on brand-new PHEVs of up to 1,800cc would decline from 93.16% to 73.44%. For new PHEVs with engine capacities of up to 2,000cc, the tax burden would fall from 132.36% to 96.10%.

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To support the expansion of EV infrastructure, the government has also proposed removing all duties and taxes on imported chargers and charging stations. The current tax burden of 39.75% on these products would be reduced to zero.

Meanwhile, the budget proposes increasing the tax burden on imported internal combustion engine vehicles with engine capacities between 1,200cc and 1,600cc from 132.36% to 155.88%.