Islamabad, November 10, 2025 – The Government of Pakistan has collected over Rs3 billion in revenue during the first quarter (July–September) of fiscal year 2025–26 through the New Energy Vehicle (NEV) Adoption Levy, according to official data released by the ministry of finance.
The levy, introduced under the Finance Act, 2025, is part of the government’s broader fiscal and environmental reforms designed to encourage the adoption of cleaner, energy-efficient transportation technologies while discouraging dependence on traditional internal combustion engine (ICE) vehicles.
Implemented under the New Energy Vehicles Adoption Levy Act, 2025, the measure seeks to support the government’s climate-friendly mobility agenda and reduce carbon emissions from the transport sector — a major contributor to Pakistan’s greenhouse gas footprint.
Key Details of the NEV Adoption Levy
According to the Federal Board of Revenue (FBR), the levy is ad valorem (percentage-based) and is applied on the invoice or assessed value of ICE vehicles, inclusive of duties and taxes. The levy does not apply to NEVs, export-bound ICE vehicles, or vehicles owned by diplomatic missions and other exempted categories.
Below are the officially notified levy rates for various vehicle categories:
| S. No. | Motor Vehicle Category | Levy to be Paid By | Rate of Levy |
| 1 | ICE motor vehicles (assembled/manufactured in Pakistan) with engine <1300cc | Manufacturer | 1% ad valorem of invoice price |
| 2 | ICE motor vehicles (imported) with engine <1300cc | Importer | 1% ad valorem of assessed value |
| 3 | ICE motor vehicles (assembled/manufactured in Pakistan) with engine 1300–1800cc | Manufacturer | 2% ad valorem of invoice price |
| 4 | ICE motor vehicles (imported) with engine 1300–1800cc | Importer | 2% ad valorem of assessed value |
| 5 | ICE motor vehicles (assembled/manufactured in Pakistan) with engine >1800cc | Manufacturer | 3% ad valorem of invoice price |
| 6 | ICE motor vehicles (imported) with engine >1800cc | Importer | 3% ad valorem of assessed value |
| 7 | Buses and trucks (assembled/manufactured in Pakistan) | Manufacturer | 1% ad valorem of invoice price |
| 8 | Buses and trucks (imported) | Importer | 1% ad valorem of assessed value |
Legal Framework and Policy Objective
Under Section 3 of the NEV Adoption Levy Act, 2025, both local manufacturers and importers are legally required to pay the levy upon production or clearance of ICE vehicles. The government retains the authority to revise levy rates and expand or adjust categories via official notifications.
Officials noted that the measure aims to gradually shift market dynamics toward clean mobility, while also bolstering fiscal revenue for green initiatives. By differentiating rates according to engine size, the government seeks to promote smaller, more efficient vehicles and accelerate the transition to electric and hybrid options.
The Rs3 billion collected in the first quarter will be directed toward renewable energy programs, electric vehicle infrastructure, and environmental sustainability projects across the country.