The Federal Board of Revenue (FBR) has extended key tax incentives for electric vehicles (EVs), keeping the sales tax exemption on imports of completely knocked-down (CKD) kits for specified EVs in place until June 30, 2027.
The move, announced through the FBR’s budget instructions for 2026-27 issued to field formations on Friday, is aimed at maintaining policy support for the country’s shift towards cleaner transport.
Under the previous rules, the exemption on imported CKD kits for specified electric vehicles was due to expire on June 30, 2026. The FBR has now extended it for another year.
Specified EVs will also continue to benefit from a reduced sales tax rate of 1 percent until June 30, 2027. The government has also introduced a reduced sales tax rate for electric trucks imported as completely built units (CBUs), along with electric buses.
The FBR said the extensions were made to ensure continuity in the tax regime and support the development of clean mobility in Pakistan.
The tax relief, however, does not mean all electric vehicles will remain free from additional taxes.
The FBR has introduced federal excise duty (FED) on high-value luxury electric vehicles. Under the revised rules, EVs priced above $75,000 and up to $110,000 will attract FED at 30 percent.
Electric vehicles valued above $110,000 will face a higher FED rate of 40 percent.
Previously, electric vehicles, including electric cars, SUVs and other EVs, were excluded from FED until June 30, 2026. The exclusion has now been extended to June 30, 2027, but with specific exceptions for high-value luxury EVs.
Luxury vehicles in other categories can already face FED rates of up to 40 percent.
The latest changes therefore maintain tax support for locally assembled and more affordable electric vehicles while increasing the tax burden on expensive imported models.
The government’s approach signals continued support for EV adoption while seeking higher revenue from luxury electric vehicles.
The FBR’s decision comes as Pakistan works to expand electric mobility and encourage investment in local EV assembly and related manufacturing.
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