New Budget Hits Middle-Class Car Buyers With Surprise Tax

The federal government has proposed a 1% NEV (New Energy Vehicle) Adoption Levy in the 2025–26 budget, targeting petrol-powered cars with engine capacities ranging from 660cc to 1300cc. The new levy aims to support electric vehicle development and infrastructure by generating revenue from conventional fuel vehicles. The proposed 1% levy would be added to the ex-factory price of eligible vehicles, resulting in modest price increases across some of Pakistan’s most popular small and mid-range car models. Here’s how the prices are expected to change: According to officials, the new levy is designed to generate funding for EV infrastructure and support the government’s broader environmental goals. By shifting a small tax burden onto buyers of internal combustion engine (ICE) vehicles, the policy hopes to gradually steer demand toward greener alternatives.