The federal government plans to introduce a new levy on petrol and diesel vehicles in the upcoming budget to establish a dedicated Electric Vehicle (EV) fund. The initiative aims to raise Rs. 122 billion over five years to support Pakistan’s transition to petroleum-free transportation.
Sources told ProPakistani that the proposed levy will be implemented as a Federal Excise Duty (FED) applicable to all imported and locally assembled petrol and diesel vehicles. The annual collection is estimated at around Rs. 24 billion, with total revenues expected to reach Rs. 122 billion by FY2030.
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The proposed feebate rates for internal combustion engine (ICE) vehicles over the next five years are as follows:
- Two and three-wheelers: Starting at 1% in FY26 and increasing to around 3% in subsequent years, totaling 14.5%.
- Four-wheelers (below 1300cc): Steady 3.2% annually, totaling 16%.
- Four-wheelers (1300cc to 1800cc): Starting at 2% in FY26, rising to 3.8%, totaling 18.9%.
- Four-wheelers (above 1800cc): Starting at 3% in FY26 and increasing to around 11%, totaling 56.2%.
- Buses and trucks: Around 3.3% annually, totaling 16.3%.
The total expected annual revenue ranges from Rs. 24 billion to Rs. 24.7 billion between FY26 and FY30.
This additional revenue will finance the implementation of the Electric Vehicle Policy 2026–30, sources added.
Apart from the EV-related measures, the budget also proposes incentives to boost local production of batteries and chargers for laptops and smartphones. However, there is no plan to increase taxes on smartphone imports.
