Levy imposed on locally manufactured, imported vehicles

ISLAMABAD: The government has slapped a new levy on locally manufactured and imported vehicles in the budget 2025-26.

This new levy is titled “Energy Vehicle Adoption Levy” on locally manufactured/assembled and imported vehicles in a bid to incentivise the masses to switch to Electric Vehicles (EVs), including buses, trucks, motorcycles, and rickshaws.

According to the Finance Bill 2025-26 tabled in parliament, the manufacturer will pay one per centum ad valorem of the invoice price, inclusive of duties and taxes, on all internal combustion engine motor vehicles assembled or manufactured in Pakistan with an engine capacity of less than thirteen hundred cubic centimeters. Person importing internal combustion engine motor vehicle will pay one per centum ad valorem of assessed value, inclusive of duties and taxes on the import of all internal combustion engine motor vehicles with engine capacity less than thirteen hundred cubic centimeters. The manufacturer will pay two per centum ad valorem of invoice price, inclusive of duties and taxes, on all internal combustion engine motor vehicles assembled or manufactured in Pakistan with engine capacity from thirteen hundred cubic centimeters to eighteen hundred cubic centimeters.

The person importing an internal combustion engine motor vehicle would pay two per centum ad valorem of assessed value, inclusive of duties and taxes on all internal combustion engine motor vehicles imported in Pakistan with engine capacity from thirteen hundred cubic centimeters to eighteen hundred cubic centimeters. The manufacturer will pay three per centum ad valorem of invoice price inclusive of duties and taxes on all internal combustion engine motor vehicles assembled or manufactured in Pakistan with an engine capacity of more than eighteen hundred cubic centimeters. 

All internal combustion engine motor vehicles imported in Pakistan with engine capacity of more than eighteen hundred cubic centimeters would be subjected to three per centum ad valorem of assessed value, inclusive of duties and taxes. The levy would be applicable on a person importing an internal combustion engine motor vehicle. The manufacturers will pay one per centum ad valorem of invoice price inclusive of duties and taxes on bus and truck with an internal combustion engine assembled or manufactured in Pakistan. A bus and truck with an internal combustion engine imported in Pakistan would be subjected to one per centum ad valorem of assessed value inclusive of duties and taxes on person importing internal combustion engine vehicle motor.