Budget 2026-27: Government Proposes Higher Duty on Premium Imported EVs
The federal government has proposed increasing duties on premium imported electric vehicles (EVs) valued above Rs. 20 million as part of Budget 2026-27.
Finance Minister Senator Muhammad Aurangzeb announced that the Federal Excise Duty (FED) will be increased on imported vehicles with engine capacities between 2,000cc and 3,000cc. The proposed increase will also apply to imported electric vehicles priced above Rs. 20 million.
In addition, duties on imported vehicles with engine capacities exceeding 3,000cc are also set to increase under the new budget proposals.
EV Incentives Extended Until 2027
The government has extended incentives on the import of Completely Knocked Down (CKD) kits for electric vehicles until June 30, 2027. The extension covers electric motorcycles, three-wheelers, passenger cars, buses, and other EV categories.
Currently, import duties on CKD kits vary depending on the level of localization and the type of components being imported.
Industry stakeholders are awaiting further details through the Finance Bill 2026-27 and the upcoming Auto Policy 2026-31, which is currently under review before formal approval.
Auto Policy 2026-31 Under Review
According to the finance minister, the new Auto Policy 2026-31 is being reviewed by the Prime Minister’s committee. Details of the policy will be presented after approval by the federal cabinet.
Automotive industry representatives expect greater clarity regarding taxation, incentives, localization requirements, and future investment plans once the policy is officially announced.
Focus on Electric Mobility
The government has also proposed a reduced sales tax rate for imported electric trucks to support infrastructure and development projects.
According to the Economic Survey 2025-26, Pakistan’s New Energy Vehicle Policy 2025-2030 aims to increase the adoption of electric and alternative-energy vehicles across the country.
The policy targets 30 percent of new vehicle sales to consist of New Energy Vehicles (NEVs) by 2030, including electric motorcycles, scooters, rickshaws, cars, buses, trucks, and light commercial vehicles.
To encourage adoption, the government plans to support vehicle electrification through subsidies, infrastructure development initiatives, and other industry support measures.
Growth in the Auto Sector
The automobile sector has shown notable growth during the current fiscal year. Imports of new and used vehicles increased, while imports of CKD and SKD kits for local assembly also recorded significant growth.
According to government data, Pakistan currently has 118 vehicle assemblers operating across two-wheeler, three-wheeler, and four-wheeler segments.
The proposed budget measures will become effective following parliamentary approval of the Finance Bill 2026-27 and implementation of the new fiscal framework.
