ISLAMABAD: In a move to promote electric vehicles (EVs) and reduce reliance on fossil fuels, the Federal Board of Revenue (FBR) has introduced a new Energy Vehicle Adoption Levy on all locally manufactured, assembled, and imported internal combustion engine (ICE) vehicles.
The FBR’s notification, issued under the First Schedule of the Finance Act, outlines a tiered ad valorem levy structure designed to favour environmentally friendly vehicles over conventional fuel-powered ones. The measure is part of a broader push to accelerate the shift toward low-emission, energy-efficient transportation.
Under the new regime, ICE vehicles with engine capacities below 1300cc will incur a 1% levy—applied to the invoice price (inclusive of duties and taxes) for locally assembled vehicles, and to the customs-assessed value for imports. Vehicles between 1300cc and 1800cc will be subject to a 2% levy, while those above 1800cc will face a 3% levy, regardless of origin.
Officials say the green levy is a strategic fiscal step to discourage the use of high-emission vehicles and incentivize the adoption of cleaner technologies, aligning with Pakistan’s environmental and energy goals.
Story by Irshad Ansari
