ISLAMABAD – The Government of Pakistan has introduced major reforms to the import duty structure for vehicles in fiscal year 2025-26. According to the revised structure, the government has introduced relief to the consumers across several vehicle categories, most importantly on imported cars.

As per reports, if you import a 1000cc non-hybrid vehicle around the price tag of Rs2.5-3 million, the new duty structure will produce results in the form of savings as compared to the previous duty structure of the last fiscal year. Earlier, the tax and duty fee on a 1000cc non-hybrid car around this price tag used to be 174pc, added to the total cost of Rs. 7.67 million.

In the revised policy of fiscal year 2025-26, the taxes have been brought down by 9-10pc to be placed at 165pc. The total landed cost has decreased, resulting in a direct saving of about Rs 2 lakh to Rs 2.5 lakh. This reduction is primarily due to a decrease in Additional Customs Duty and a 5% reduction in Regulatory Duty on vehicles.

For further relief, the concerned authorities introduced changes in the Additional Customs Duty (ACD), 7pc to 6pc on all imported vehicles. A further cut in Regulatory Duty (RD) for bigger vehicles and 4×4 vehicles that have an engine between 1801cc and 3000cc.

The total tax rate on mid-size cars (1301–1500cc) has been slashed from 174% to 165% in fiscal year 2025-26. However, the vehicle category that witnessed the largest cut was vehicles ranging from 1801–3000cc saw the biggest cut, with the total tax rate decreased from 429% to 361%. The vehicles with engines above 3000cc received relief; the total tax rate was slashed by 69% to stand at 401%.

Meanwhile, minor reductions were applied to pickups, vans, and motorcycles. The automobile experts remarked that the reduced duties in higher-end segments signal a strategic shift to discourage the smuggling and misuse of imported vehicles by making legal imports easier and more available for consumers.

Vehicle Tax Comparison: 2024 vs 2025

ISLAMABAD – The newly unveiled federal budget for fiscal year 2025-26 has provided yet another relief to the salaried class. The tax slabs and rates were adjusted to provide relief as part of the government’s agenda.

The budget proposal includes the following:

• For individuals earning between PKR 600,000 and PKR 1,200,000 annually, a tax of 1 percent will be applied to the income exceeding PKR 600,000.
• Individuals earning over PKR 1,200,000 but under PKR 2,200,000 will incur a tax of 11 percent on the income exceeding PKR 1,200,000, along with a fixed tax of PKR 6,000.
• For the income bracket exceeding PKR 2,200,000 but less than PKR 3,200,000, a tax rate of 23 percent will apply to the amount exceeding PKR 2,200,000, in addition to a fixed tax of PKR 116,000.

ISLAMABAD – The federal government made a new move to hike the sales tax on imported solar panels by 18%. According to Finance Minister Muhammad Aurangzeb, this move aims at creating a level playing field between locally manufactured and imported solar panels as part of the federal budget for fiscal year 2025-25.

The initiative seeks to establish fairness between imported and locally manufactured solar panels and is anticipated to greatly enhance the growth of Pakistan’s domestic solar panel industry, according to the Finance Minister.

Federal Finance Minister Muhammad Aurangzeb, in his budget speech, reiterated the government’s stance to fulfill their commitments of reforming the sales tax system and addressing its issues. Furthermore, he added that the imposition of this tax is a key step towards achieving equality in competition within the solar panel market. The government believes that this measure will promote local production, stimulate economic growth, and potentially create new job opportunities in the country’s renewable energy sector..