During his budget speech, Finance Minister Muhammad Aurangzeb announced the Government’s decision to impose Federal Excise Duty (FED) on imported vehicles.
Under the proposed measures, Federal Excise Duty will also apply to SUVs with engine capacities ranging from 2,000cc to 3,000cc.
In addition, the Government has proposed an increase in the Federal Excise Duty on vehicles with engine capacities exceeding 3,000cc.
The Finance Minister further stated that a Federal Excise Duty is proposed on electric vehicles valued at more than PKR 20 million. He added that a new automotive policy is currently under consideration by a committee constituted by the Prime Minister.
According to the Finance Minister, the existing concessionary regime for electric motorcycles, rickshaws and buses will remain unchanged. Furthermore, the Government has proposed a reduced sales tax rate of 1% on imported electric trucks to support the transition towards cleaner transport solutions.
In a separate measure aimed at easing the burden on international travellers, the Finance Minister announced the abolition of Federal Excise Duty on overseas business-class air travel.
These proposals form part of the Government’s broader fiscal and transport policy objectives outlined in the Federal Budget.
