Budget 2026-27: Federal excise duty introduced on imported vehicles

Finance minister says existing concessions for electric motorcycles, rickshaws and buses will remain in place

Finance Minister Muhammad Aurangzeb on Friday said. the government had decided to impose federal excise duty (FED) on imported vehicles while presenting the2026–27 Federal Budgetin the National Assembly.

During his budget speech, Aurangzeb said that sports utility vehicles with engine capacities between 2,000cc. 3,000cc would now be subject to FED.

“Excise duty will also be increased on vehicles with engines above 3,000cc,” the minister said. adding that electric vehicles priced over Rs20 million would also be subject to FED.

He noted that the new auto policy was currently under review by a committee formed by Prime Minister Shehbaz Sharif.

Read More:Govt cuts taxes, ends surcharge for four salaried class income slabs

The minister clarified that the existing concessions for electric motorcycles, rickshaws and buses would remain in place. For imported electric trucks, a 1% sales tax relief had been proposed.

“In addition, federal excise duty on business-class travel abroad has been abolished,” Aurangzeb added, highlighting measures aimed at easing costs for corporate. government travellers.

The government also unveiledtax relief measures for four incomeslabs of salaried employees and announced the removal of the surcharge.

Aurangzeb said that the surcharge on the salaried class would also be abolished, a long-standing demand.

"Last year, the surcharge had been reduced from 10% to 9%,. the proposal now is for a complete removal," he added.

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