New taxes and duties on imported vehicles to start from July 1

ISLAMABAD:  The federal government has announced new duty and tax rates on imported vehicles, which will take effect from July 1 under the Finance Bill approved by Parliament.

According to the new plan, higher duties will be applied on large imported vehicles. Cars with engine capacity between 2000cc and 3000cc will now face an 86% duty, while vehicles above 3000cc will be charged 92%.

However, the government has reduced taxes on several smaller vehicle categories. The total duty on 1800cc vehicles has been reduced from 156% to 74%. For vehicles above 1500cc, the rate has dropped from 91% to 57%.

Similarly, duties on cars between 1000cc and 1500cc have been cut from 76% to 52%, while 850cc vehicles will now face a reduced rate of 42% instead of 66%.

The Finance Bill also confirms that no special excise duty will be applied on vehicles up to 1800cc under the new auto policy.

For electric vehicles, new customs duties have been introduced. Imported EVs valued up to $75,000 will face a 30% duty, while those above $110,000 will be charged 40%.

From July 1, a one-time fixed tax of Rs 10,000 will be applied on vehicles up to 1000cc. A token tax of Rs 20,000 has been set for older models (before 2010). For vehicles between 1001cc and 1300cc, the tax will be 0.3% of the invoice value.

Under the new system, overall token tax in the federation has been fixed at 0.25% of the invoice value. Older models will be charged Rs 2,500, while post-2010 models will pay Rs 6,200.