FBR imposes green levy to push Evs

In a bid to accelerate the adoption of electric vehicles (EVs) and energy-efficient transportation, the Federal Board of Revenue (FBR) has imposed Energy Vehicle Adoption Levy on all locally manufactured, assembled and imported vehicles that run on traditional internal combustion engines (ICE).

The FBR has formally issued a notification outlining the rates of the levy, which is structured to favour environment-friendly vehicles over conventional fuel-powered ones. Officials said the new tax regime aims to discourage reliance on fossil fuel and promote a shift toward modern, low-emission technology.

As per the First Schedule of the Finance Act, ICE vehicles with engines smaller than 1300cc will now be subject to a 1% ad valorem levy. For locally produced or assembled vehicles in this category, the levy will apply to the invoice price, inclusive of duties and taxes.

Similarly, for imported cars under 1300cc, the 1% levy will be calculated based on the customs-assessed value, inclusive of applicable duties and taxes. For vehicles with engine capacities between 1300cc and 1800cc, the levy has been set at 2%, again applicable on the invoice price for local units and the customs value for imports.

Meanwhile, vehicles exceeding 1800cc will attract a 3% ad valorem levy, whether manufactured locally or brought in from abroad.