Summary Pakistan’s finance committee approved heavy taxes on imported luxury, hybrid and electric vehicles, while exempting cars up to 1800cc from special excise duty.
ISLAMABAD (Dunya News) - In a move likely to provide relief to middle-income consumers, Minister of State for Finance Bilal Azhar Kayani announced that vehicles with engine capacities of up to 1800cc will remain exempt from the proposed special excise duty, while imported luxury, hybrid and electric vehicles will face significantly higher taxes.
The announcement came during a meeting of the National Assembly Standing Committee on Finance, which approved proposals aimed at increasing duties on high-end imported vehicles while maintaining tax relief for smaller cars.
Addressing the committee, Bilal Azhar Kayani said the government had deliberately decided not to impose the special excise duty on vehicles up to 1800cc, stressing that the objective was not to make larger and luxury vehicles cheaper.
Officials of the Federal Board of Revenue (FBR) informed lawmakers that imported vehicles with engine capacities ranging from 2,000cc to 3,000cc would be subject to an 86 per cent special excise duty, while those exceeding 3,000cc would face a 92 per cent duty. The committee approved both proposals.
The meeting also endorsed a proposal to extend for one year the reduced one per cent sales tax facility on imported components used in electric vehicles.
In addition, lawmakers approved proposals to impose customs duties ranging from 30 to 40 per cent on imported electric vehicles. Under the plan, EVs valued at up to $75,000 would attract a 30 per cent customs duty, while vehicles priced above $110,000 would face a 40 per cent duty.
The committee further gave the green light to similar customs duties of 30 to 40 per cent, along with special excise duties ranging from 86 to 92 per cent, on imported hybrid, electric and luxury vehicles.
During the session, FBR Chairman Rashid Mahmood Langrial also assured lawmakers that the existing 20 per cent regulatory duty on imported mobile phones would be reduced, although no timeframe or revised rate was announced.
