Islamabad (Lord Media): The government has decided to increase taxes on large vehicles and expensive electric cars in the budget for the fiscal year 2026-27. Finance Minister Muhammad Aurangzeb announced that a federal excise duty will be imposed on vehicles with engine capacities from 2000cc to 3000cc, while the duty on vehicles exceeding 3000cc will be further increased.
In the budget speech, it was stated that luxury electric vehicles costing over 20 million U.S. dollars will also be taxed. However, the existing concessions for electric motorcycles, rickshaws, cars, and buses will remain, and imported electric trucks will benefit from a 1% sales tax.
According to FBR officials, the current 30% duty on petrol and diesel vehicles up to 2000cc will remain unchanged. However, for larger vehicles with engines between 2000cc and 3000cc, the duty is proposed to increase from 30% to 70%.
For vehicles with engines over 3000cc, the duty is proposed to rise from 40% to 81%. Electric vehicles priced under 20 million U.S. dollars will remain affordable, while luxury electric cars priced between 20 million and 30 million U.S. dollars will face a 30% duty.
The finance minister further stated that the new automotive policy is under consideration by a committee formed by the Prime Minister and will be presented to the Parliament after cabinet approval.
