The federal government is set to introduce a new levy on petrol and diesel vehicles in the upcoming budget to help fund Pakistan’s transition to electric vehicles (EVs), aiming to collect Rs. 122 billion over five years through this initiative.
According to sources, the proposed levy will take the form of a Federal Excise Duty (FED) and apply to all imported and locally assembled vehicles that run on petrol or diesel.
The goal is to generate Rs. 24 billion annually, with the money going into a dedicated EV fund.
| Feebate on Internal Combustion Engine (ICE) Vehicles | FY26 | FY27 | FY28 | FY29 | FY30 | Total |
| Two and 3 Wheelers @ 1% | 3% | 3% | 2.9% | 2.8% | 2.8% | 14.5% |
| 4-wheelers (below 1300cc) @ 1% | 3.2% | 3.2% | 3.2% | 3.2% | 3.2% | 16% |
| 4-wheelers (1300cc-1800cc) @ 2% | 3.8% | 3.8% | 3.8% | 3.8% | 3.7% | 18.9% |
| 4-wheelers (Above 1800cc) @ 3% | 11.4% | 11.3% | 11.3% | 11.2% | 11.1% | 56.2% |
| Buses and Trucks @ 1% | 3.3% | 3.3% | 3.3% | 3.3% | 3.2% | 16.3% |
| Total Revenues (Billion PKR) | 24.7 | 24.6 | 24.5 | 24.2 | 24 | 122 |
Additionally, the budget includes proposals to encourage the local production of batteries and chargers for laptops and smartphones, although there are currently no plans to raise import taxes on smartphones.