A draft automotive policy approved by Prime Minister Shehbaz Sharif introduces an Automotive Development Levy that will affect imported and domestically built vehicles. Cars with engines from 1,001cc to 2,000cc will face a 2% charge, while those exceeding 2,000cc will be taxed at 10%, according to sources cited by ProPakistani.
Engines under 1,000cc are excluded from the levy, as are two- and three-wheelers and agricultural tractors, which will carry a zero rate.
The levy targets internal combustion engine (ICE) vehicles in the listed categories. Vehicles classified under PCT 87.03 with capacities between 1,001cc and 2,000cc will be charged 2%, and any vehicle above 2,000cc will incur a 10% rate.
Additional vehicle types are also slated for the levy. Prime movers, except those used in agriculture, trucks, light commercial vehicles (LCVs), buses and vans will each be subject to a 2% charge.
The draft outlines the following rates:
| Category | Levy |
| 2-Wheelers and 3-Wheelers | 0% |
| Agricultural Tractors | 0% |
| Cars below 1,000cc | 0% |
| Cars above 2,000cc | 10% |
| Prime movers, excluding agricultural tractors | 2% |
| Trucks and LCVs | 2% |
| Buses and Vans | 2% |
The levy is part of the draft proposal. Final details such as the calculation basis and the start date will shape how car prices are affected.
Both imported and locally assembled or manufactured ICE vehicles are covered by the proposed rates.
