The Federal Board of Revenue has started collecting the newly introduced Special Excise Duty on imported cars from July 1. This imported cars excise duty creates winners and losers across Pakistan’s vehicle market.

Lower customs duties under tariff rationalization will reduce import taxes on many passenger vehicles and electric vehicles priced below $75,000. However, luxury EVs and larger-engine imported SUVs will become more expensive.

Importers must pay the levy during customs clearance alongside customs duties. The same assessment and collection mechanisms apply as with standard customs duties.

Imported electric cars valued up to $75,000 remain exempt from the duty, allowing them to benefit from lower duties. However, luxury EVs valued above $75,000 face a 30 percent duty, while those above $110,000 face 40 percent.

Imported motor cars with engine capacities of 2,000cc to 3,000cc face an 86 percent Special Excise Duty. Vehicles exceeding 3,000cc face a 92 percent duty.

Although customs duties have been reduced, the newly imposed duty offsets those reductions for luxury vehicles. Therefore, luxury car prices will rise despite tariff rationalization efforts.

The policy reflects government priorities emphasizing EV adoption while discouraging high-engine vehicle consumption. Budget-conscious consumers will find cheaper deals on affordable cars and EVs, while luxury buyers will face substantially higher costs.