FBR imposes new levy on petrol, diesel vehicles to promote electric alternatives

ISLAMABAD (Mudasar Ali Rana) - The Federal Board of Revenue (FBR) has issued a notification implementing a new Energy Vehicle Levy on petrol and diesel-powered vehicles.

The move is part of a broader strategy to promote electric vehicles (EVs) and discourage the use of fossil fuel-based transport in Pakistan.

According to the official notification, the levy will be applied one percent on locally assembled or imported vehicles under 1300cc, including pickups, buses, and trucks, 2% on vehicles ranging from 1300cc to 1800cc and 3% on vehicles above 1800cc.

For locally manufactured or assembled vehicles, the levy will be paid by the manufacturer, while importers will be responsible for paying the levy on imported vehicles.

The policy reflects the government’s intent to transition toward a cleaner, more sustainable transportation system by making traditional fuel vehicles less economically attractive.