Islamabad: The Federal Board of Revenue (FBR) has generated Rs10.22 billion through the New Energy Vehicle (NEV) Adoption Levy in the first half of fiscal year 2025–26 (July to December), according to figures released by the Ministry of Finance.
Official data shows a significant increase in revenue during the second quarter, with only Rs3 billion collected in the first quarter. The sharp rise reflects stronger enforcement measures and improved compliance following the implementation of the levy.
Introduced under the Finance Act, 2025, the NEV Adoption Levy forms part of Pakistan’s broader fiscal and environmental strategy aimed at promoting cleaner transportation while discouraging the use of traditional internal combustion engine (ICE) vehicles. The initiative supports national climate commitments and efforts to reduce carbon emissions from the transport sector.
Under Section 3 of the Act, the levy applies to manufacturers and importers of ICE vehicles based on engine capacity and production status. All proceeds are credited to the Federal Consolidated Fund.
The FBR applies the levy on an ad valorem basis, calculated as a percentage of the vehicle’s invoice or assessed value, inclusive of applicable duties and taxes. New energy vehicles, export-bound ICE vehicles, and automobiles owned by diplomatic missions remain exempt, along with other categories notified by the government.
Notified NEV Adoption Levy Rates
- ICE vehicles below 1300cc: 1% (local manufacturers and importers)
- ICE vehicles from 1300cc to 1800cc: 2%
- ICE vehicles above 1800cc: 3%
- Buses and trucks: 1%
Manufacturers are required to pay the levy at the production or assembly stage, while importers must clear the levy at customs.
The legal framework also authorizes the federal government to revise rates, introduce new vehicle categories, or withdraw existing ones through official notifications. Exemptions for NEVs are intended to accelerate the transition toward clean mobility.
Industry experts believe the levy will help expand fiscal space and encourage sustainable transport solutions, including electric cars and electric mini vans. However, they emphasize that wider adoption of NEVs will depend on supportive incentives, charging infrastructure, and long-term policy consistency.
