ISLAMABAD: The National Assembly (NA) Standing Committee on Finance and Revenues approves the imposition of Special Excise Duty on Electric Vehicles (EVS) and luxury SUVs based on their value in dollars.
The government has proposed a reduction in the Regulatory Duty on imported vehicles and would compensate for its revenues through the imposition of excise duty. It indicates that the auto policy, which is in the process of finalisation, has been diminished for all practical purposes, as claimed by local manufacturers and auto parts manufacturers.
The NA panel has finalised 15-page report for laying before the National Assembly for approving amendments to the Finance Bill for 2026-27, including imposition of special excise duty on EVs and luxury SUVs on the basis of their value in dollars.
The National Assembly is all set to consider approval of the Finance Bill 2026-27 on Tuesday (today). The government has already apprised the IMF and parliamentarians that a total of 26 additional measures, including policy, enforcement and hike in tax rates, will yield Rs1020 billion into the coffers of the Federal Board of Revenue (FBR) in the next fiscal year. The FBR has been assigned to achieve an ambitious tax collection target of Rs15.264 trillion for 2026-27 against the revised target of Rs 12.983 trillion for the outgoing fiscal ending on June 30, 2026.
For electric cars and electric SUVs, imported in CBU condition having value as determined under Section 25 of the Customs Act, 1969, whereby the value does not exceed US$75,000, there will be zero tax. If the value exceeds US$75,000 and goes up to US$110,000, the tax rate of 30pc ad valorem is proposed to be charged. If the value exceeds US$110,000, the tax rate of 40pc ad valorem will be charged.
The imported motor cars, SUVs and other motor vehicles, excluding auto rickshaws, principally designed for the transport of persons (other than those of headings 87.02), electric vehicles (4 wheelers) including station wagons, double cabin (4x4) pickup vehicles and racing cars having (a) cylinder capacity of 2000cc and above but not exceeding 3000cc, the tax and rate of 86 ad valorem will be charged. Having a cylinder capacity exceeding 3000cc, the tax rate of 92pc ad valorem will be charged.
The rate of minimum tax under Sub-Section (1) of Section 113, would be 0.5pc in the case of distributors, dealers, sub-dealers, wholesalers of 14 goods including pharmaceutical, fertiliser, cigarette, sugar, locally manufactured mobile phones, fresh and frozen food in canned or packaged form, electronics, beverages and dairy products, pasta, cereals, biscuits, nuts, snacks and similar packaged food items, condiments and baking items in bottled or packaged form, skincare and cosmetics, hair care, oral care, baby care, cleaning agents like laundry detergents, dishwashing soaps and floor cleaners, toilet paper, paper towels, facial tissues, napkins, and similar products, and trash bags, aluminium foil, air freshener and insect sprays. The withholding tax on revenues received from social media platforms will be charged at a rate of 5pc.
For the steel sector, the NA panel finalised that in the case of steel melters, steel re-rollers and composite units, the tax would be collected based on per unit electricity consumption, including use of electricity produced by a captive power plant or through any other alternative source of energy at the rate or rates as prescribed by the Board, through notification in the official gazette.
The tax so collected would be an adjustable input tax, to be claimed in the return of the month in which such payment is made: Provided also that the Board may prescribe a lower per unit rate or rates of electricity consumption based on input tax paid on imports or other invoices issued through electronic invoicing system digitally issued invoices for compliant and digitally integrated steel melters, re-rollers and composite units to minimise creation of refunds: Provided further also that the per unit sales tax would be determined by the Board based on minimum notified price under clause (46) of Section 2 of this Act and the industrial benchmarks of consumption of electricity against per ton production of steel products.”
The Sales Tax exemption for aircraft of PIACL has been granted; however, the import or lease of aircraft and parts thereof by any airline company registered in Pakistan will be effective from the first day of July 2027.
The NA panel also finalised that an individual liable to pay tax on an imported mobile phone device through the device identification, registration and blocking system of the Pakistan Telecommunication Authority, may be allowed to pay tax in instalments as may be prescribed, subject to the condition that all the instalments would be paid before the end of the financial year in which the import is made.
“Provided that the manufacturer shall, apart from any other liability that he may incur under the Act, be liable to pay 3pc value addition tax on imports on an ad valorem basis, along with a default surcharge, in case the imported goods are supplied in the same state, whether in the same packing, repacked, or in bulk.
The rate of minimum value addition tax would be 1pc in the case of import of coal, subject to the conditions that such imported coal is exclusively and directly supplied to Independent Power Producers (IPPs).
For provision of data sharing of potential tax evaders, the State Bank of Pakistan (SBP) may establish, operate and maintain a secure centralised virtual repository of banking data, comprising such information, records, and financial transactions of persons maintained by scheduled banks based on unique identifiers, as may be prescribed by the Board and collect and provide data and results as per clauses (a) and (b) of this sub-section.
A penalty of Rs500,000 for the first default and Rs1 million for every subsequent default would be imposed on the principal officer as defined in clause (44A) of Section 2 of this Act, or the chief executive officer of the company, or a member in case of an association of persons and an individual in case of sole proprietorship.
