Islamabad, February 9, 2026 – The Federal Board of Revenue (FBR) has collected Rs10.22 billion as New Energy Vehicle (NEV) adoption levy during the first half (July–December) of the fiscal year 2025-26, according to official data released by the Ministry of Finance.
The figures indicate a sharp rise in collections during the second quarter, as the levy generated only Rs3 billion in the first quarter, highlighting growing enforcement and improved compliance under the new fiscal framework.
The NEV adoption levy was introduced under the Finance Act, 2025 as part of broader fiscal and environmental reforms aimed at encouraging the transition toward eco-friendly transport technologies while discouraging reliance on conventional internal combustion engine (ICE) vehicles. The initiative aligns with Pakistan’s climate action goals and its commitment to reducing carbon emissions from the transport sector.
Under Section 3 of the Act, the levy is imposed on manufacturers and importers of ICE vehicles, depending on engine capacity and whether the vehicle is locally assembled or imported. The collected amount is deposited into the Federal Consolidated Fund.
According to FBR, the levy is charged on an ad valorem basis, calculated as a percentage of the vehicle’s invoice or assessed value, inclusive of applicable duties and taxes. Notably, the levy does not apply to new energy vehicles, export-bound ICE vehicles, or vehicles owned by diplomatic missions, as well as other categories exempted through official government notifications.
Notified Rates of NEV Adoption Levy
| S. No. | Motor Vehicle Category | Levy to be Paid By | Rate of Levy |
| 1 | ICE vehicles (locally assembled/manufactured) <1300cc | Manufacturer | 1% ad valorem of invoice price |
| 2 | ICE vehicles (imported) <1300cc | Importer | 1% ad valorem of assessed value |
| 3 | ICE vehicles (locally assembled/manufactured) 1300–1800cc | Manufacturer | 2% ad valorem of invoice price |
| 4 | ICE vehicles (imported) 1300–1800cc | Importer | 2% ad valorem of assessed value |
| 5 | ICE vehicles (locally assembled/manufactured) >1800cc | Manufacturer | 3% ad valorem of invoice price |
| 6 | ICE vehicles (imported) >1800cc | Importer | 3% ad valorem of assessed value |
| 7 | Buses and trucks (locally assembled/manufactured) | Manufacturer | 1% ad valorem of invoice price |
| 8 | Buses and trucks (imported) | Importer | 1% ad valorem of assessed value |
Legal Framework Under Section 3
Section 3 establishes the legal basis for the levy, mandating manufacturers to pay upon production or assembly, while importers are required to pay at the time of customs clearance. Sub-section (2) specifies that rates shall follow the First Schedule, while sub-section (3) empowers the Federal Government to revise rates, add new categories, or withdraw existing ones through official notification. Sub-section (4) provides exemptions for new energy vehicles and select ICE categories to promote clean mobility and uphold diplomatic protocols.
Experts believe the levy will support the shift toward sustainable transport, create fiscal space, and help Pakistan meet its environmental targets, although they stress the need for incentives and infrastructure development to accelerate NEV adoption nationwide.