ISLAMABAD – In a move aimed at encouraging the use of electric vehicles in Pakistan, the Federal Board of Revenue (FBR) has imposed a New Energy Vehicle (NEV) Levy ranging from 1 percent to 3pc on locally manufactured, assembled, and imported traditional engine vehicles.
A formal notification has been issued, introducing the new levy structure under the Finance Act. The tax is applicable only to internal combustion engine (ICE) vehicles, as part of the government’s strategy to shift focus toward electric mobility and reduce reliance on fossil fuels.
As per the first schedule of the Finance Act:
Locally assembled or manufactured vehicles under 1300cc will be subject to 1% ad valorem levy on the invoiced price (including duties and taxes).
Imported vehicles under 1300cc will also face a 1% levy on their assessed customs value.
Vehicles ranging from 1300cc to 1800cc will incur a 2% levy for both local manufacturers and importers, calculated on invoiced or customs-assessed value.
Vehicles above 1800cc will face a 3% ad valorem levy for both local manufacturers and importers.
Additionally, locally assembled buses and trucks will now be subject to a 1% NEV levy.
This measure is designed to discourage the production and import of conventional fuel-powered vehicles while incentivizing cleaner, greener alternatives.
