FBR Imposes 1-3% Levy on ICE Vehicles

Islamabad, July 18, 2025, 07:36 PM PKT — The Federal Board of Revenue (FBR) has unveiled a bold tax overhaul, announcing adoption levy rates on locally manufactured/assembled and imported internal combustion engine (ICE) vehicles to drive a shift toward electric and energy-efficient alternatives, per official statements. Manufacturers of ICE vehicles under 1300CC face a 1% ad valorem levy on the invoice price (including duties and taxes), matched by importers paying 1% on the assessed value. For 1300CC to 1800CC vehicles, the levy jumps to 2% for manufacturers and importers, while above 1800CC, it hits 3% for both.

Imported and locally assembled buses and trucks with combustion engines also incur a 1% levy, signaling a strategic push to curb carbon emissions and boost sustainable transport. Web context highlights green policy shifts, while posts found on X show mixed reactions—some support eco-goals, others fear cost hikes. Critically, the narrative of “sustainable transition” may mask economic strain—web data points to past tax resistance, and X sentiment suggests distrust in effective implementation, hinting at potential pushback.