New budget measures target luxury EV imports with up to 40% excise duty to enhance revenue collection and regulate high-value vehicle imports.
The federal government has unveiled significant taxation measures for the automobile sector in the Pakistan Budget 2026-27, including the introduction of Federal Excise Duty (FED) on imported electric vehicles (EVs) valued above Rs20 million.
The new proposal, announced as part of the federal budget, reflects the government’s broader strategy to enhance revenue generation while focusing on luxury imports.
The measure primarily targets high-end electric vehicles imported for personal use in Completely Built Unit (CBU) condition.
According to the Finance Bill 2026, imported electric cars, electric SUVs, and electric pickup vehicles will now be subject to varying rates of FED based on their import value, including customs duty.
Vehicles with an import value of up to Rs20 million will remain exempt from the excise duty, providing relief to relatively affordable EV segments.
However, imported EVs valued above Rs20 million and up to Rs30 million will attract a 30% Federal Excise Duty. Meanwhile, vehicles exceeding Rs30 million in import value will face an even higher FED rate of 40%.
The proposed taxation structure is aimed at high-net-worth individuals purchasing luxury electric vehicles from abroad.
Policymakers believe the move could help generate additional revenue for the national exchequer while maintaining a progressive taxation framework.
Under the proposed regime, the duty structure for imported electric vehicles is as follows:
EVs with import value up to Rs20 million: 0% FED
EVs exceeding Rs20 million and up to Rs30 million: 30% FED
EVs exceeding Rs30 million: 40% FED
Industry observers suggest that the new taxes may increase the cost of premium imported EVs in Pakistan, potentially affecting demand in the luxury electric vehicle segment. However, locally assembled EVs and lower-priced imported models remain outside the scope of these additional duties.
The latest measures underscore the government’s intent to balance environmental goals with fiscal needs as Pakistan’s electric mobility market continues to evolve.
