ISLAMABAD (Web Desk) – The federal government is set to introduce a revised customs duty and tax structure for imported vehicles from July 1, a move expected to significantly influence Pakistan’s automobile market and consumer buying trends.
The new rates, approved under the Finance Bill 2026-27, aim to increase taxes on luxury and high-engine-capacity vehicles while providing relief for smaller imported cars.
Under the revised framework, imported vehicles with engine capacities of 3001cc and above will be subject to a 92 percent duty. Likewise, vehicles falling within the 2000cc to 3000cc category will face an 86 percent duty, making high-end imports considerably more expensive.
In contrast, the government has reduced duties and taxes on several lower-engine-capacity vehicle categories. The total tax burden on imported 1800cc vehicles has been cut from 156 percent to 74 percent, while vehicles above 1500cc will see rates reduced from 91 percent to 57 percent.
Imported vehicles with engine capacities between 1000cc and 1500cc will now attract a total duty and tax of 52 percent, down from 76 percent. Similarly, the rate for 850cc vehicles has been lowered from 66 percent to 42 percent.
Industry observers believe the revised tax structure could encourage greater demand for smaller and more affordable imported vehicles, while reducing interest in luxury and large-engine models due to higher costs.
The policy is also expected to have implications for Pakistan’s domestic automobile sector, potentially creating a more competitive environment and providing opportunities for local manufacturers to strengthen their market position.
The new taxation regime will come into effect at the start of the next fiscal year and is likely to reshape purchasing patterns across the country’s vehicle market.
