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.
Thank you for reading this post, don't forget to subscribe!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
