Summary Pakistan’s government has imposed new Federal Excise Duty on imported SUVs, luxury vehicles, and high-value EVs, while keeping incentives for e-mobility and commercial transport unchanged.
ISLAMABAD (Dunya News)- The federal government has announced a major tax policy shift in Budget 2026–27, introducing a Federal Excise Duty (FED) on imported vehicles, particularly SUVs and luxury categories, as part of broader revenue expansion measures.
According to Finance Minister Muhammad Aurangzeb, the new measures include FED on imported SUVs with engine capacities between 2,000cc and 3,000cc, while vehicles above 3,000cc will face an increased duty rate.
The government has also proposed imposing Federal Excise Duty on high-value electric vehicles priced above Rs 20 million, signaling an effort to tax luxury segments of the EV market.
However, the budget maintains a supportive stance toward green mobility. Electric motorcycles, rickshaws, and buses will continue to benefit from existing incentives, and imported electric trucks will be subject to a reduced 1% sales tax facility.
In a relief measure for business travelers, the government has abolished FED on business-class international air travel.
