Urdu Report Desk
The federal government expects to collect Rs. 188.58 billion over five years through the proposed Automotive Development Levy on locally assembled or manufactured vehicles, according to revenue projections in the draft auto policy approved by Prime Minister Shehbaz Sharif.
The estimates indicate that the levy could become a significant source of government revenue during the five-year period from fiscal year 2026-27 to 2030-31.
Year-Wise Revenue Projections
According to the draft policy, the government expects to collect Rs. 37.71 billion in fiscal year 2026-27, rising to Rs. 38.46 billion in 2027-28.
Projected revenue is estimated at Rs. 38.29 billion for 2028-29, followed by Rs. 37.30 billion in 2029-30 and Rs. 36.83 billion in 2030-31.
The total projected collection from locally assembled or manufactured vehicles over the five-year period stands at Rs. 188.58 billion.
Proposed Levy Rates Based on Engine Capacity
The draft auto policy proposes different levy rates depending on vehicle type and engine capacity.
Cars with engines up to 1,000cc would carry a zero-rate levy, while vehicles with engine capacities ranging from 1,001cc to 2,000cc would be subject to a 2% levy.
Cars with engines above 2,000cc would face a proposed levy of 10%.
The proposed rates would apply to imported as well as locally assembled or manufactured internal combustion engine vehicles.
Exemptions and Rates for Other Vehicles
The draft policy proposes exemptions for two- and three-wheelers and agricultural tractors.
A 2% levy is proposed for trucks, light commercial vehicles, buses, vans and specified prime movers.
Separate Revenue Estimates for Imported Vehicles
The policy document also includes separate revenue projections for levies on imported vehicles.
The government expects annual collections from locally assembled or manufactured vehicles to remain relatively stable during the five-year period, ranging from Rs. 36.83 billion to Rs. 38.46 billion.
Final Revenue Will Depend on Implementation
The final revenue impact will depend on how the policy is implemented, the applicable levy calculation mechanism and the number and types of vehicles sold or imported during the five-year period.
