Govt likely to impose carbon levy on petrol, diesel vehicles

ISLAMABAD: The National Assembly Standing Committee on Finance has recommended the imposition of a carbon levy on all locally manufactured and imported petrol and diesel vehicles with engine capacities above 1300cc, ARY News reported.

The decision was made during a recent meeting of the National Assembly Standing Committee on Finance with Pakistan People’s Party MNA Syed Naveed Qamar in chair.

The committee endorsed a 2 percent carbon levy on petrol and diesel vehicles with engine capacities ranging from 1300cc to 1800cc, applicable to both locally produced and imported units.

For vehicles exceeding 1800cc, a 3 percent carbon levy has been approved for both local and imported petrol and diesel models.

Meanwhile, the committee rejected proposals to impose a 2 percent carbon levy on hybrid vehicles with engine capacities between 1300cc and 1800cc, as well as a 3percent levy on hybrid vehicles above 1800cc, as part of the budget discussions.

These recommendations will be presented for approval in the budget 2025-26 under the Finance Bill, 2025.