Islamabad, July 3, 2025: The federal government has officially finalized the Climate Support Levy (CSL) under Budget 2025–26, replacing the earlier-proposed NEV Adoption Levy. This new tax targets internal combustion engine (ICE) and hybrid electric vehicles (HEVs), aiming to promote cleaner transportation across Pakistan.
The CSL imposes a one-time tax on vehicles with tailpipe emissions. All new ICE and hybrid cars will be taxed, while fully electric vehicles (EVs) and PHEVs with battery range over 50 km are exempt.
Climate Support Levy Rates:
- 1% on vehicles up to 1300cc
- 2% on vehicles between 1301cc–1800cc
- 3% on vehicles above 1800cc
The Federal Board of Revenue (FBR) is expected to notify the levy soon via Statutory Regulatory Order (SRO).
Car Prices See Immediate Hike
Popular models across Suzuki, Toyota, Honda, Hyundai, Kia, and others are now pricier:
- Suzuki Alto VXR Upgraded: Rs. 2,855,270 (↑ Rs. 28,270)
- Toyota Corolla Altis 1.6 CVT: Rs. 6,690,180 (↑ Rs. 131,180)
- Hyundai Sonata 2.5: Rs. 11,026,150 (↑ Rs. 321,150)
This price surge is due to automakers likely passing the full CSL amount onto buyers.
Why Hybrids Are Not Exempt
Though environmentally friendlier than ICEs, HEVs are not fully electric. Models like the Toyota Corolla Cross HEV, Haval H6 HEV, and Kia Sportage Hybrid don’t meet the exemption criteria and are subject to the CSL.
Imported Vehicles Hit Hardest
Imported models face even steeper increases:
- Toyota Prado: ↑ Rs. 1.998 million
- Land Cruiser 300: ↑ Rs. 3.6 million
These are taxed at 3%, significantly raising already high prices.
Read More: Suzuki Hikes Prices Across All Car Models
With the Climate Support Levy now official, car buyers in Pakistan face higher costs unless opting for EVs or qualifying PHEVs. The CSL aims to reshape the country’s automotive market by incentivizing cleaner mobility options while funding the New Energy Vehicle (NEV) policy.
