Luxury car buyers are in shock as Pakistan imposes excise …..

Admin.CEO 30 June, 2026News & Updates, Pakistan News

Luxury car buyers are in shock as Pakistan imposes excise duty of up to 132%.

ISLAMABAD – The dream of importing luxury cars into Pakistan has become more expensive than you might imagine as the government unveiled a massive tax hike on high-engine capacity vehicles, introducing a new special excise duty that pushes the total excise burden to 132 percent.

The revised tax regime will drastically increase the prices of imported luxury vehicles, putting many popular premium models out of reach for most buyers. The additional duties are expected to significantly increase import costs, forcing dealerships to revise prices once the new measures come into effect.

Budget 2026-27 dealt a major blow to the luxury automobile market, introducing the largest ever tax hike on imported high-end vehicles. The new fiscal measures are set to dramatically increase the prices of premium cars and SUVs, with the total excise burden rising to 132% for some models.

The biggest change comes through the introduction of Special Excise Duty (SED) under the newly inserted Schedule IA of the Federal Excise Act. Unlike earlier tax measures, SED will be charged in addition to the existing Federal Excise Duty (FED), significantly increasing the overall tax liability on imported completely built-up (CBU) vehicles.

The new levy covers imported passenger cars, SUVs, station wagons, 4×4 double cabin pickups and racing vehicles. Imported vehicles equipped with 2,000cc to 3,000cc engines will now attract 86% special excise duty, while the existing 30% federal excise duty remains in force. This pushes the total excise burden to a whopping 116%.

The highest tax is reserved for vehicles with engines above 3,000cc. These premium imports will now be subject to a special excise duty of 92% on top of the existing 40% federal excise duty, resulting in a combined excise tax of 132%.

The government, however, defended the move as part of its broader revenue generation strategy by discouraging the import of high-displacement vehicles. However, for consumers eyeing luxury SUVs and executive sedans, the new tax structure signals the end of relatively affordable premium imports.