NA panel backs excise duty on higher-value electric vehicles, luxury SUVs

The National Assembly Standing Committee on Finance and Revenues has approved amendments to the Finance Bill 2026-27 proposing Special Excise Duty on electric vehicles and luxury SUVs based on their value in dollars.

According to a news report, the committee has finalised a 15-page report for presentation before the National Assembly, which is set to consider the Finance Bill 2026-27 on Tuesday.

Under the proposed amendments, electric cars and electric SUVs imported in completely built-up condition will face zero duty if their value, determined under Section 25 of the Customs Act, 1969, does not exceed $75,000.

A 30% ad valorem duty has been proposed for electric cars and electric SUVs valued above $75,000 and up to $110,000.

For vehicles valued above $110,000, the proposed duty rate is 40% ad valorem.

The government has also proposed reducing the regulatory duty on imported vehicles and compensating for the revenue impact through excise duty.

According to local manufacturers and auto parts manufacturers, the proposed change indicates that the auto policy currently under finalisation has been diluted for practical purposes.

For imported motor cars, SUVs and other motor vehicles, excluding auto rickshaws and vehicles covered under heading 87.02, the amended bill proposes 86% ad valorem duty on vehicles with cylinder capacity of 2,000cc and above but not exceeding 3,000cc.

For vehicles with cylinder capacity exceeding 3,000cc, the proposed rate is 92% ad valorem.

The category includes vehicles principally designed for passenger transport, electric four-wheelers, station wagons, double-cabin 4x4 pickup vehicles and racing cars.

The government has already informed the IMF and parliamentarians that 26 additional measures, including policy changes, enforcement steps and tax rate increases, are expected to generate Rs1,020 billion for the Federal Board of Revenue in the next fiscal year.

The Federal Board of Revenue has been assigned a tax collection target of Rs15.264 trillion for 2026-27, compared with the revised target of Rs12.983 trillion for the outgoing fiscal year ending June 30, 2026.