The federal government has proposed a mix of incentives and new taxes for electric and luxury vehicles in the budget for FY2026-27.
According to budget documents, the exemption on the import of completely knocked down (CKD) kits for electric vehicles is proposed to be extended until June 30, 2027. At the same time, the government has proposed new duties on luxury electric vehicles (EVs) and other high-end vehicles.
Under the proposal, imported EVs for personal use in completely built-up (CBU) condition will remain duty-free up to a value of Rs. 20 million. EVs valued above Rs. 20 million and up to Rs. 30 million will face a 30 percent duty, while those priced above Rs. 30 million will be subject to a 40 percent duty.
The budget also proposes a 40 percent ad valorem Federal Excise Duty (FED) on imported cars, SUVs and other vehicles with engine capacities above 2000cc and up to 3000cc.
Vehicles with engine capacities exceeding 3000cc will face a 41 percent ad valorem FED under the proposed measures.
