Finance Minister Muhammad Aurangzeb presented the 2026-27 federal budget in the National Assembly, announcing a new Federal Excise Duty on imported vehicles across multiple engine categories.
Sports utility vehicles with engine capacities between 2,000cc and 3,000cc will now be subject to Federal Excise Duty, while the existing duty on vehicles above 3,000cc will be increased under the new budget.
Electric vehicles priced above Rs20 million will also fall under Federal Excise Duty, while existing tax concessions for electric motorcycles, rickshaws, and buses will remain fully intact under the new measures.
A 1% sales tax relief has been proposed for imported electric trucks, while a committee formed by Prime Minister Shehbaz Sharif is currently reviewing the government’s new auto policy for finalisation.
Aurangzeb announced that Federal Excise Duty on business-class international travel has been abolished, a measure the government says is aimed at reducing costs for corporate and government travellers going abroad.
The budget also includes tax relief for four income slabs of salaried employees, with the government announcing a complete removal of the surcharge that had long been demanded by the salaried class.
The surcharge on the salaried class was reduced from 10 percent to 9 percent last year, but the 2026-27 budget now proposes its complete abolition, providing broader financial relief to salaried workers across Pakistan.
