Finance Minister Muhammad Aurangzeb on Friday announced that the government has decided to impose federal excise duty (FED) on imported vehicles while presenting the 2026–27 Federal Budget in the National Assembly.
New Excise Duties on Vehicles
During his budget speech, Aurangzeb stated that sports utility vehicles with engine capacities between 2,000cc and 3,000cc would now be subject to FED. “Excise duty will also be increased on vehicles with engines above 3,000cc,” the minister added. He further noted that electric vehicles priced over Rs20 million would also be subject to FED.
Auto Policy Under Review
The minister highlighted that the new auto policy is currently under review by a committee formed by Prime Minister Shehbaz Sharif. Existing concessions for electric motorcycles, rickshaws, and buses will remain unchanged. For imported electric trucks, a 1% sales tax relief has been proposed.
Relief for Business Travelers
“In addition, federal excise duty on business-class travel abroad has been abolished,” Aurangzeb added, emphasizing measures aimed at easing costs for corporate and government travelers.
Tax Relief for Salaried Class
The government also unveiled tax relief measures for four income slabs of salaried employees and announced the removal of the surcharge. Aurangzeb said that the surcharge on the salaried class would be abolished, a long-standing demand. “Last year, the surcharge had been reduced from 10% to 9%, but the proposal now is for a complete removal,” he added.
