ISLAMABAD: The federal government’s Finance Bill 2026–27 has unveiled significant changes in taxes and customs duties on imported vehicles, set to take effect from July 1. The revised structure introduces higher duties on larger engine capacity vehicles while offering reductions in several existing tax slabs.
As per the details of the Finance Bill, higher customs duties have been imposed on large engine capacity imported vehicles. Imported vehicles with engine capacity of more than 2,000cc will be taxed at 86 percent while vehicles with an engine capacity of 3,001cc and above will be taxed at 92 percent.
As a new amendment in the Finance Bill, lower duties have been proposed for medium size vehicles. Imported vehicles in the 1,800cc category will now be taxed at 74 percent instead of 156 percent. Import duty for vehicles above 1,500cc has been reduced to 57 percent instead of the existing 91 percent. In 1,000cc to 1,500cc range, import duty has been reduced to 52 percent from 76 percent. Vehicles below 850cc engine capacity will be taxed at 42 percent compared to the existing 66 percent.
Further, there are certain policy measures in respect of automobile taxation that the Finance Bill is seeking to introduce. The special excise duty will not be charged on vehicles having 1,800cc engine capacity and below under the newly introduced auto policy.
The electric vehicles will also see an altered duty import regime. The large electric vehicles valued from $75,000 to $110,000 will be charged 30 percent duty, while those valued more than $110,000 will pay 40 percent duty.
Further, a fixed duty of Rs10,000 will be charged for vehicles having 1,000cc engine capacity and below. There will also be token tax rate revision in relation to old vehicles. The old vehicles up to 1,000cc and manufactured before 2010 will pay Rs20,000 annually as token tax, while up to 1,300cc will have 0.3 percent token tax on total invoice value.
Further, there has been token tax adjustment by the government. A flat rate of 0.25 percent of invoice value will be applied throughout the federal regions, while vehicles having manufacturing year 2010 and below will have a token tax of Rs2,500, while post 2010 will be Rs6,200.
