Cabinet alters timeline for electric vehicle tax implementation

The Cabinet approved a new, phased approach for calculating the special tax on electric vehicles, transitioning over three years instead of implementing the full tax next year as initially planned.

For vehicles valued at less than JD 10,000 (excluding customs), which are the most commonly used by citizens, the special tax will be set at 10 percent in 2025, increasing to 12 percent in 2026 and 15 percent in 2027.

For vehicles valued between JD 10,000 and JD 25,000 (excluding customs), the tax will be 30 percent in 2025, rising to 35 percent in 2026 and 40 percent in 2027.

For vehicles valued over JD 25,000 (excluding customs), the special tax will be 40 percent in 2025, 45 percent in 2026, and 55 percent in 2027.

The new mechanism will also reduce the overall tax on gasoline vehicles from 86 percent to 70 percent.

Hybrid vehicles will have a fixed special tax rate of 60 percent, offering citizens an economical alternative.

Despite the reduction in special tax on gasoline vehicles, the prices of electric vehicles will remain lower.

This new approach balances the interests of both importers and citizens while ensuring legislative stability.

Additionally, it reflects a commitment to transparency and clarity in the vehicle sector.