ISLAMABAD: The government has proposed new tax measures targeting imported luxury vehicles and SUVs as part of its upcoming budget, aiming to increase revenue from high-end automobiles, official documents showed.
Under the proposal, a Federal Excise Duty (FED) would be imposed on imported vehicles and SUVs with engine capacities ranging from 2,000cc to 3,000cc.
The budget also suggests a higher tax rate for imported vehicles with engine capacities above 3,000cc, further tightening fiscal measures on large-engine automobiles.
In addition, luxury electric vehicles valued at over Rs20 million would be brought into the tax net under the new proposals.
Pakistan will maintain existing tax incentives on electric motorcycles, rickshaws and buses, while proposing a reduced sales tax of 1% on imported electric trucks, Finance Minister Muhammad Aurangzeb said during his budget speech.
The finance minister said the government is continuing its support for the promotion of clean and electric transport by retaining the current concessionary regime for electric two- and three-wheelers as well as electric buses.
He added that a 1% sales tax facility is being proposed for imported electric trucks as part of efforts to encourage green logistics and transport solutions.
Aurangzeb also announced that the Federal Excise Duty on business class air travel abroad has been abolished, a move aimed at easing travel-related costs and simplifying taxation in the aviation sector.
Officials said the move is part of a broader strategy to boost government revenues by increasing taxation on expensive imported vehicles, including SUVs, large cars, and premium electric vehicles.
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The proposals are expected to be reviewed as part of the budget approval process.
