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FBR imposes NEV adoption Levy on traditional vehicles, see details inside

FBR imposes NEV adoption Levy on traditional vehicles, see details inside

Web Desk July 19, 2025 Add Bol News as a trusted source

The Federal Board of Revenue (FBR) has officially imposed the NEV adoption levy on internal combustion engine (ICE) vehicles, aiming to promote energy-efficient and electric alternatives by reducing reliance on conventional fuel-powered transport.

The government issued the notification after announcing its comprehensive New Energy Vehicle (NEV) Policy for 2025–30, which targets a transformative shift in the country’s transport sector. The policy aims to ensure that 30% of all new vehicle sales are electric by 2030.

The First Schedule of the Finance Act states that the NEV adoption levy applies to both locally assembled and imported ICE motor vehicles. Manufacturers must pay 1% ad valorem of the invoice price (including duties and taxes) for ICE vehicles with engine capacity below 1300cc. Importers of these vehicles must also pay 1% of the assessed value.

The First Schedule to the Finance Act, 2025, sets the rate for the New Energy Vehicle Adoption Levy.

S. No. Motor vehicle category Levy to be paid Rate of Levy
1 All internal combustion engine motor vehicles assembled or manufactured in Pakistan with an engine capacity of less than thirteen hundred cubic centimeters Manufacturer One percent ad valorem of the invoice price, inclusive of duties and taxes. 
 
2 All internal combustion engine motor vehicles imported in Pakistan with an engine capacity of less than thirteen hundred cubic centimeters Person importing an internal combustion motor engine vehicle One percent ad valorem of assessed value, inclusive of duties and taxes. 
 
3 All internal combustion engine motor vehicles assembled or manufactured in Pakistan with engine capacity from thirteen hundred cubic centimeters to eighteen hundred cubic centimeters. Manufacturer Two percent ad valorem of invoice price, inclusive of duties and taxes. 
 
4 All internal combustion engine motor vehicles imported in Pakistan with engine capacity from thirteen hundred cubic centimeters to eighteen hundred cubic centimeters. Person importing an internal combustion motor engine vehicle Two percent ad valorem of assessed value, inclusive of duties and taxes. 
 
5 All internal combustion engine motor vehicles assembled or manufactured in Pakistan with an engine capacity of more than eighteen hundred cubic centimeters. Manufacturer Three percent ad valorem of the invoice price, inclusive of duties and taxes. 
 
6 All internal combustion engine motor vehicles imported in Pakistan with an engine capacity of more than eighteen hundred cubic centimeters. Person importing an internal combustion motor engine vehicle. Three per cent ad valorem of assessed value, inclusive of duties and taxes. 
 
7 A bus or truck with an internal combustion engine assembled or manufactured in Pakistan. Manufacturer One percent ad valorem of invoice price, inclusive of duties and taxes. 
 
8 A bus and a truck with an internal combustion engine were imported into Pakistan. Person importing an internal combustion engine motor vehicle. One per cent ad valorem of assessed value, inclusive of duties and taxes. 
 
Manufacturers and importers must pay a 2% ad valorem levy on vehicles with engine capacity between 1300cc and 1800cc. For ICE vehicles exceeding 1800cc, a 3% ad valorem levy is payable on both locally assembled and imported units.

Pakistan has imposed the NEV adoption levy on buses and trucks as well. Authorities will tax imported commercial vehicles at 1%, and locally assembled ones at the same rate. This move reflects the government’s broader strategy to shift towards sustainable transportation and achieve its climate goals.

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