Budget 2026–27 proposes new FED structure for THESE EVs in Pakistan

ISLAMABAD – The federal government unveiled major tightening of taxation on luxury vehicles in Budget 2026–27, proposing broadened and potentially increased Federal Excise Duty (FED) on high-end imported cars, SUVs, and expensive electric vehicles. According to budget speech, FED will apply to imported vehicles and SUVs with engine capacities above 2,000 cc. While this category was already covered under the existing tax framework, the latest announcement has created widespread confusion in the auto market, with uncertainty over whether this is a completely new levy or simply a restructuring of the current duty structure. Auto industry observers believe more likely scenario is a revision or upward adjustment of FED rates on premium imported vehicles rather than a fresh tax introduction. However, the actual financial impact remains unclear until the Finance Bill schedule is released and official notifications are issued by the Federal Board of Revenue (FBR). The government extended tax net to luxury electric vehicles as well. Under the proposed changes, electric vehicles priced above Rs 2 crore will now be subject to FED, marking notable shift in policy, as these high-end EVs were previously exempt from this tax. The final applicable tax rates for both categories have not yet been announced and will only be confirmed after the Finance Bill is finalized. For now, uncertainty remains high, with key details regarding rates, affected segments, and enforcement expected to emerge in upcoming official announcements from the Finance Bill and FBR. Budget 2026: Tax Slabs for Salaried Class Explained