Summary
- The federal government has announced new tax measures on imported and luxury vehicles in the Budget 2026–27.
- Finance Minister Muhammad Aurangzeb said a federal excise duty (FED) will now be applied to imported vehicles.
- Aurangzeb said the government is also providing tax relief across four income slabs for salaried employees.
The federal government has announced new tax measures on imported and luxury vehicles in the Budget 2026–27.
Finance Minister Muhammad Aurangzeb said a federal excise duty (FED) will now be applied to imported vehicles. The announcement was made during his budget speech in the National Assembly.
He said sport utility vehicles (SUVs) with engine capacities between 2,000cc and 3,000cc will be subject to excise duty. He added that vehicles above 3,000cc will face a higher tax rate.
The minister also confirmed that electric vehicles priced above Rs20 million will now fall under the FED regime. This move targets high-end and luxury electric cars.
Aurangzeb said the government is reviewing a new auto policy. A committee has been formed by Prime Minister Shehbaz Sharif to examine the sector in detail.
Despite new taxes on luxury vehicles, the government has maintained existing incentives for small electric transport. Concessions for electric motorcycles, rickshaws, and buses will continue without change.
He also announced relief for imported electric trucks. A 1% sales tax reduction has been proposed to support green transport initiatives.
In a separate measure, the government abolished federal excise duty on business-class air travel abroad. The step is aimed at reducing travel costs for corporate and official passengers.
The finance minister further highlighted broader tax relief measures in the budget. He said the surcharge on salaried individuals has been completely removed.
He explained that last year the surcharge had been reduced from 10% to 9%, but the new budget proposes its full elimination.
Aurangzeb said the government is also providing tax relief across four income slabs for salaried employees. He said these steps are designed to reduce financial pressure on the working class.
He added that the budget reflects a balance between revenue generation and public relief. According to him, luxury consumption is being taxed while middle-income groups are being supported.
The government says the new measures are part of broader efforts to stabilize the economy while ensuring targeted relief for citizens.
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