Buyers of large-engine vehicles in Pakistan may soon face higher costs as the federal government plans to introduce a new Federal Excise Duty (FED) under Budget 2026-27. The move is expected to significantly impact vehicles prices across the premium automobile segment.
Finance Minister Muhammad Aurangzeb unveiled the federal budget in the National Assembly with a total outlay of Rs18,771 billion. Among the proposed measures is a new excise duty targeting vehicles with engine capacities above 2,000cc.
Industry experts believe the decision will lead to a noticeable increase in vehicles prices for several popular models. The tax will apply to both imported completely built units (CBUs) and locally assembled vehicles within the affected category.
As a result, well-known models such as the Toyota Fortuner and Toyota Revo are expected to become more expensive from July 2026. Luxury sedans, premium SUVs, and high-performance pickup trucks will also be affected by the additional tax burden.
Automobile market observers say the increase in vehicles prices will likely be reflected in showroom rates once the new fiscal measures come into effect. Manufacturers and dealers may adjust invoice prices to account for the higher tax costs.
The proposed changes are part of broader government efforts to increase revenue under the new budget framework. Officials believe the tax will mainly affect higher-end vehicle buyers while generating additional funds for the national economy.
Analysts suggest that rising vehicles prices could influence consumer buying patterns. Some buyers may postpone purchases, while others could shift toward smaller-engine vehicles that remain outside the scope of the new duty.
The policy is also expected to impact demand in Pakistan’s premium vehicle market. Dealers and industry stakeholders are closely monitoring the situation to assess how consumers respond once the revised prices are announced.
Despite concerns from potential buyers, government officials maintain that the measure is part of wider fiscal reforms aimed at strengthening economic stability. Further details regarding implementation are expected to emerge as the new budget takes effect.
For now, customers interested in large-engine vehicles are keeping a close watch on developments, as the proposed duty could result in substantial price increases across several leading automobile brands in Pakistan.
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