Here’s How Much Car Prices Will Increase If the New Mini Budget is Approved

The car industry of Pakistan has been making strides in terms of sales and production volumes. The current auto sector stakeholders have reportedly become fearful of an impending drop in the market cap, following the mini-budget which proposes significant increases in tax rates for vehicles over 1000cc.

The government has proposed an increase in Federal Excise Duty (FED) from 2.5 percent to 5 percent on locally assembled vehicles with engine displacement between 1000cc and 1999cc, and an increase from 5 percent to 10 percent on locally assembled vehicles with engine displacement up to 2000cc and larger.

For local vehicles with engine displacement between 851cc and 999cc, a jump from 12.5 percent back to 17 percent in General Sales Tax (GST) has been proposed.

Furthermore, for the Completely Built-Up (CBU) imports between 1,000cc and 1,799cc, an FED increase from 25 percent to 30 percent, and for 3000cc and larger-engined CBUs, a bump from 30 percent to 40 percent has been proposed.

A host of other tax increases have also been proposed in the mini-budget. If the aforementioned propositions come to fruition, the prices of some of the most popular cars could go up by huge margins:

Note: This list does not include vehicles with engine displacements less than 851cc as those vehicles are exempted from proposed taxes:

Passenger Cars Current Prices (PKR) Expected Prices (PKR) Price Increase (PKR) % Increase
Pak Suzuki Motor Company (PSMC)

Cultus VXR 1,904,000 1,980,160 76,160 4.0
Cultus VXL 2,105,000 2,189,200 84,200 4.0
Cultus AGS 2,272,000 2,362,880 90,880 4.0
Wagon R VXR 1,760,000 1,830,400 70,400 4.0
Wagon R VXL 1,852,000 1,926,080 74,080 4.0
Wagon R AGS 2,024,000 2,104,960 80,960 4.0
Toyota Indus Motor Company (IMC)

Yaris 1.3 GLI M/T 2,549,000 2,611,171 62,171 2.4
Yaris 1.3 GLI CVT 2,749,000 2,816,049 67,049 2.4
Yaris 1.3 ATIV M/T 2,679,000 2,744,341 65,341 2.4
Yaris 1.3 ATIV CVT 2,849,000 2,918,488 69,488 2.4
Yaris 1.5 ATIV M/T 2,899,000 2,969,707 70,707 2.4
Yaris 1.5 ATIV CVT 3,099,000 3,174,585 75,585 2.4
Corolla Altis X 1.6 M/T 3,299,000 3,379,463 80,463 2.4
Corolla Altis X 1.6 A/T 3,449,000 3,533,122 84,122 2.4
Corolla Altis X 1.6 A/T SE 3,799,000 3,891,569 92,569 2.4
Corolla Altis X 1.8 CVT 3,779,000 3,871,171 92,171 2.4
Corolla Altis X Grande 1.8 CVT 4,079,000 4,178,488 99,488 2.4
Corolla Altis X Grande 1.8 CVT (Black Trim) 4,099,000 4,198,976 99,976 2.4
Hilux Standard Double-Cabin M/T 6,149,000 6,292,000 143,000 2.3
Hilux Revo G M/T 6,759,000 6,916,186 157,186 2.3
Hilux Revo G A/T 7,109,000 7,274,326 165,326 2.3
Hilux Revo V A/T 7,779,000 7,959,907 180,907 2.3
Fortuner G 2.7 VVTI (4×2) 8,149,000 8,343,024 194,024 2.4
Fortuner V 2.7 VVTI (4×4) 9,399,000 9,622,786 223,786 2.4
Fortuner Sigma 4 2.8 TDI (4×4 9,849,000 10,083,500 234,500 2.4
Honda Atlas Cars Limited (HACL)

City 1.2 M/T 2,729,000 2,795,561 66,561 2.4
City 1.2 CVT 2,949,000 3,020,927 71,927 2.4
City 1.5 CVT 3,069,000 3,143,584 74,854 2.4
City Aspire 1.5 M/T 3,199,000 3,277,024 78,024 2.4
City Aspire 1.5 CVT 3,369,000 3,451,171 82,171 2.4
Civic 1.8 iVTEC 3,979,000 4,074,496 95,496 2.4
Civic 1.8 iVTEC Oriel 4,259,000 4,362,878 103,878 2.4
Civic 1.5T RS Turbo 5,049,000 5,170,176 121,176 2.4
BR-V 1.5 iVTEC S 3,599,000 3,686,780 87,780 2.4
Kia Luck Motor Corporation Limited (LMCL)

Kia Picanto M/T 2050,000 2,132,000 82,000 4.0
Kia Picanto A/T 2,150,000 2,236,000 86,000 4.0
Kia Stonic EX 3,660,000 3,747,840 87,840 2.4
Kia Stonic EX+ 3,880,000 3,973,120 93,120 2.4
Kia Sportage Alpha 4,650,000 4,763,415 113,415 2.4
Kia Sportage FWD 5,150,000 5,274,610 125,610 2.4
Kia Sportage AWD 5,650,000 5,787,805 137,805 2.4
Sorento 2.4 FWD 6,836,000 6,998,762 162,762 2.4
Sorento 2.4 AWD 7,812,000 7,998,000 186,000 2.4
Sorento 3.5 V6 FWD 8,203,000 8,398,310 195,310 2.4

Information provided by Ismail Iqbal Securities (IIS) PVT. LTD.

Bear in mind that the proposed amount for Advance Tax (AT) on vehicle registration has not been added to the aforementioned prices as they are not a part of the vehicle’s Ex-Factory prices and have to be borne by the car buyers. The proposed Advance Tax rates are as follows:

Capacity Previous Tax (Rs.) Proposed Tax (Rs.) Increase (Rs.)
1000cc 50,000 100,000 +50,000
1001cc-2000cc 100,000 200,000 +100,000
2001cc-above 200,000 400,000 +200,000

As can be seen in the table above, the proposed increases in tax rates are much larger for 1000cc cars. This seems to be in direct clash with the government’s vision to encourage the sales and production of smaller vehicles.

It must also be noted that, although the absolute change in the prices of expensive vehicles is much higher, the rate of increase is still a mere drop in the bucket for the high-end car buyers due to their strong purchasing power. Instead, the new mini-budget ironically proposes to push the prices of small cars even further out of the reach of small car buyers.

Either way, the economy-car sales, in particular, are likely to take a huge hit in the coming days if this Finance Bill is approved by the parliament.



  • close
    >