Govt to levy up to 10% ADL on ICE vehicles

The government plans to impose an Automotive Development Levy of 2% to 10% on imported and locally made petrol- and diesel-powered vehicles, The Express Tribune reported. Public service vehicles and vehicles up to 2000cc will face the minimum rate, while the levy will not cover two- and three-wheelers, tractors or vehicles up to 1000cc. It will remain in force during the policy period and include a sunset clause.

The proposed New Energy Vehicles Policy 2025-30 keeps sales tax at 1% for battery electric vehicles, compared with 6% for range-extended vehicles and 9% for plug-in hybrids. The concessions will not cover NEVs priced above $50,000, while the proposal also removes FED on ICE vehicles up to 1000cc and exempts most NEVs from FED, SED, CVT and WHT. Levy proceeds are intended for DLTL reimbursement, research and development, vendor development, audits and the Pakistan Automotive Testing Institute.

The plan also sets customs-duty incentives for some imported BEVs and proposes that the SBP consider raising NEV vehicle-finance limits to Rs10 million and the repayment period to five years. Current limits are Rs3 million and three years. The policy also retains 0% customs duty on imported charging stations and calls for work on battery swapping and rental arrangements.