Govt imposes excise duty on imported vehicles, raises taxes on large SUVs, luxury EVs

ISLAMABAD: Finance Minister Muhammad Aurangzeb said on Friday that the government has decided to impose a Federal Excise Duty (FED) on imported vehicles as part of new budget measures.

Presenting the budget, he said that the duty will also apply to sport utility vehicles (SUVs) with engine capacity between 2,000cc and 3,000cc.

Aurangzeb said that the government is increasing excise duty on vehicles above 3,000cc, while proposing a new duty on electric vehicles valued above Rs20 million.

He said that a new auto policy was under review by a committee formed by the prime minister.

The finance minister said that existing tax incentives would continue for electric motorcycles, rickshaws and buses, while a reduced 1 per cent sales tax has been proposed for imported electric trucks.

He further said that the Federal Excise Duty on business class air travel abroad has been abolished under the new fiscal measures.