ISLAMABAD – The Federal Board of Revenue (FBR) has announced the adoption levy rates on locally manufactured/assembled and imported internal combustion engine (ICE) vehicles as part of its efforts to promote the shift toward electric and energy-efficient alternatives.
Under the new tax regime, manufacturers of ICE vehicles with engine capacities under 1300CC will be required to pay a 1% ad valorem levy on the invoice price, inclusive of duties and taxes. Similarly, importers of these vehicles will also be required to pay 1% ad valorem on the assessed value, inclusive of duties and taxes.
For ICE vehicles with engine capacities between 1300CC and 1800CC, the manufacturer will pay a 2% ad valorem of the invoice price, including duties and taxes, while importers will pay 2% ad valorem on the assessed value. For vehicles with engine capacities above 1800CC, the tax will be 3% ad valorem on the invoice price for manufacturers and 3% ad valorem on the assessed value for importers.
Additionally, the new tax regime also applies to imported and locally assembled buses and trucks with combustion engines, which will incur a 1% levy. The changes aim to encourage the adoption of electric vehicles by taxing more traditional, less energy-efficient alternatives, marking a significant step in Pakistan’s efforts to reduce carbon emissions and promote sustainable transportation.
