A government source confirmed that the Cabinet reviewed its Decision No. (4306), issued on June 28, 2025, concerning the cancellation of all previous exemptions for vehicles from the general sales tax. As a result, all types of vehicles—whether gasoline-powered, electric, or hybrid—are now subject to a 16% sales tax, based on Article 23 of the General Sales Tax Law No. 6 of 1994, following the recommendation of the Economic Modernization and Development Committee in its session on August 31, 2025.
اضافة اعلان
The source explained that in its session on September 8, 2025, the Cabinet decided to exempt electric and hybrid vehicles that had completed customs clearance before the issuance of Decision No. (4306) from the general sales tax, in order to rectify the situation and ensure fairness.
Previously, on June 28, 2025, the government had amended the special tax system for vehicles, subjecting electric and hybrid cars to the general sales tax, whereas they had previously only paid a higher special tax, unlike gasoline vehicles, which were subject to both the general sales tax and the special tax.
This amendment led to overlapping tax burdens on some vehicles cleared just days before the decision, necessitating their exemption from the new sales tax. The source noted that this applies to only about 800–900 vehicles, emphasizing that the measure aims to ensure fairness and serve the public interest.
It is worth noting that on June 28, 2025, under the chairmanship of Prime Minister Jaafar Hassan, the Cabinet approved an amended special tax system that included a comprehensive reduction in total taxes and customs fees on vehicles, helping to ease citizens’ financial burdens and address distortions in the sector.
Under the amendment, the total tax on gasoline vehicles decreased from 71% to 51%, a reduction of 28%, while the tax on hybrid vehicles dropped from 60% to 39%, a 35% reduction. The special tax on electric vehicles was fixed at 27% for all categories, replacing the previous system that gradually raised the tax to 55%.
