Govt Cuts Duties to Encourage EV Use

The government plans to extend tax incentives for electric buses and trucks until June 30, 2030, in the proposed budget for fiscal year 2026-27. This specific regulatory move is aimed entirely at reducing environmental pollution and improving national energy security across the country.

The proposed budget also outlines structural changes to lower the existing taxes on imported electric vehicles (EVs). For imported electric vehicles priced up to $25,000, the total tax burden will experience a significant drop, falling to 64 percent from the previous rate of 93 percent. Meanwhile, for the imported electric vehicles that are priced up to $50,000, the cumulative tax burden will come down to 80 percent.

For plug-in hybrid electric vehicles (PHEVs), supplementary duties will be reduced under the new fiscal proposals. Additionally, the regulatory duty currently levied on imported vehicles with engine capacities up to 1,800cc will be completely removed. As a direct result of these duty adjustments, the total tax burden on PHEVs up to 1,800cc will fall to 73.44 percent from the earlier rate of 93.16 percent. For plug-in hybrid electric vehicles with engine capacities up to 2,000cc, the total tax incidence will decrease to 96.10 percent from the previous mark of 132.36 percent.

Furthermore, to systematically support the expansion of essential EV infrastructure, all customs duties and taxes on imported EV chargers and specialized charging stations will be completely removed.