FBR Imposes New Tax on Local and Imported Fuel Cars

The Federal Board of Revenue (FBR) has announced a new levy for New Energy Vehicle (NEV) adoption in Pakistan. This new tax mainly targets vehicles with internal combustion engines (ICE). The aim is to push people to switch to electric and energy-efficient vehicles. The new levy is part of the First Schedule of the Finance Act. FBR imposed tax on both locally made and imported cars. Now, car makers and importers will pay an extra percentage of tax based on the engine size of the vehicle.

FBR Imposes New Tax on Local and Imported Fuel Cars

Here is the detail of the imposed levy;

Locally Assembled or Manufactured Vehicles (Pakistan)

Engine capacity below 1300cc

• • Levy: 1% of invoice price (including duties and taxes)

Engine capacity from 1300cc to 1800cc

• • Levy: 2% of invoice price (including duties and taxes)

Engine capacity above 1800cc

• • Levy: 3% of invoice price (including duties and taxes)

Buses and trucks (internal combustion engine)

• • Levy: 3% of invoice price (including duties and taxes)

Imported Vehicles (into Pakistan)

Engine capacity below 1300cc

• • Levy: 1% of assessed value (including duties and taxes)

Engine capacity from 1300cc to 1800cc

• • Levy: 2% of assessed value (including duties and taxes)

Engine capacity above 1800cc

• • Levy: 3% of assessed value (including duties and taxes)

Buses and trucks (internal combustion engine)

• • Levy: 1% of invoice price (including duties and taxes)

This new tax policy shows the government’s plan to move away from fuel-powered vehicles. By putting extra costs on ICE vehicles, the FBR wants people to think about greener choices.

Many countries are encouraging electric vehicles to cut down pollution and save fuel costs. Pakistan is now taking steps in the same direction.

If this plan works well, it may help increase the use of electric cars, buses, and trucks on the roads. In the long run, this could help the country reduce its fuel import bill and improve air quality too.