The new draft auto policy approved by Prime Minister Shehbaz Sharif proposes a new Automotive Development Levy on imported and locally assembled or manufactured vehicles, with cars between 1,001cc and 2,000cc facing a 2 percent levy and vehicles above 2,000cc facing a 10 percent levy, sources told ProPakistani.
Vehicles with engine capacities below 1,000cc would be exempt from the levy. Two- and three-wheelers and agricultural tractors would also carry a zero rate.
The levy would apply to internal combustion engine (ICE) vehicles under the specified categories. The policy sets a 2 percent rate for vehicles classified under PCT 87.03 with engine capacities from 1,001cc to 2,000cc, while vehicles above 2,000cc would face a 10 percent rate.
Other vehicle categories would also be subject to the proposed levy. Prime movers, excluding those used for agriculture, trucks and light commercial vehicles (LCVs), as well as buses and vans, would each carry a 2 percent rate.
The draft policy’s proposed rates are as follows:
| 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. Its final implementation details, including the basis on which the rates would be calculated and the effective date, would determine the impact on car prices.
The proposed rates cover both imported and locally assembled or manufactured internal combustion engine vehicles.
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