The National Assembly Standing Committee on Finance and Revenue has approved the imposition of a special excise duty on electric vehicles and luxury sport utility vehicles based on their US dollar value, as it finalised its recommendations on the Finance Bill 2026-27 ahead of the budget's passage by the lower house in Pakistan.

The committee completed a 15-page report containing amendments to the Finance Bill, including proposals related to imported vehicles, minimum tax on a range of consumer goods, taxation of the steel sector, mobile phone import payments, and data-sharing arrangements aimed at identifying potential tax evaders.

The National Assembly was scheduled to take up the Finance Bill 2026-27 for approval on June 23rd. The government has already informed the IMF and parliamentarians that 26 additional measures, including policy changes, enforcement initiatives and higher tax rates, are expected to generate PKR 1 trillion (US$ 3.6 billion) for the Federal Board of Revenue (FBR) in the next financial year. The FBR has been assigned a tax collection target of PKR 15.3 trillion for 2026-27, compared with the revised target of PKR 12.9 trillion for the outgoing financial year ending on June 30th, 2026.

Under the committee's approved proposals, imported electric cars and electric SUVs in completely built-up condition valued at up to US$ 75,000 would remain exempt from the new tax. Vehicles valued above US$ 75,000 and up to US$ 110,000 would be subject to a 30% ad valorem tax, while those valued above US$ 110,000 would be subject to a 40% ad valorem tax.

For imported motor cars, SUVs and other passenger vehicles, excluding auto-rickshaws, with engine capacities of 2,000 cc and above but not exceeding 3,000 cc, an ad valorem tax rate of 86% has been proposed. For vehicles with engine capacities above 3,000 cc, the tax rate would be 90%.

The government has also proposed reducing the regulatory duty on imported vehicles and offsetting the resulting revenue loss through the new excise duty. Local assemblers and auto parts manufacturers have stated that the forthcoming auto policy has effectively been diluted. The committee also approved a minimum tax rate of 0.5% under Section 113 for distributors, dealers, sub-dealers and wholesalers dealing in 14 categories of goods. These include pharmaceuticals, fertiliser, cigarettes, sugar, locally manufactured mobile phones, packaged fresh and frozen food, electronics, beverages and dairy products, pasta, cereals, biscuits, nuts, snacks, condiments, baking products, skincare and cosmetics, hair care products, oral care products, baby care products, cleaning products, tissue paper products, trash bags, aluminium foil, air fresheners and insect sprays.

The committee also finalised a proposal to impose a 5% withholding tax on revenues received from social media platforms.

For the steel sector, the committee approved a mechanism under which tax would be collected from steel melters, steel re-rollers and composite units based on per-unit electricity consumption, including electricity generated through captive power plants or alternative energy sources, at rates to be notified by the board.

The tax collected under this mechanism would be adjustable as input tax in the return for the month in which payment is made. The board would also be authorised to prescribe lower rates of electricity consumption for compliant and digitally integrated units to minimise refund claims. Per-unit sales tax would be linked to the minimum notified price and industrial benchmarks for electricity consumption per ton of steel produced.

Under another provision, manufacturers would be liable to pay a 3% value-added tax on imports on an ad valorem basis, together with a default surcharge, if imported goods are supplied in the same condition in which they were imported, whether in the same packaging, repackaged or supplied in bulk.

The committee also approved a minimum value-added tax of 1% on coal imports, subject to the condition that the imported coal is supplied exclusively and directly to independent power producers. To facilitate data sharing for the identification of potential tax evaders, the committee approved a proposal allowing the State Bank of Pakistan to establish, operate and maintain a secure centralised virtual repository of banking data. The repository would contain prescribed information, records and financial transactions of individuals maintained by scheduled banks on the basis of unique identifiers. It would provide data and analytical results as required by the FBR.

A penalty of PKR 500,000 for a first default and PKR 1 million for each subsequent default would be imposed on the principal officer, chief executive officer, member of an association of persons, or sole proprietor in cases of non-compliance under the relevant provisions.