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Govt to Increase Sales Tax on Small Cars

The prices of locally manufactured or assembled cars with an engine capacity of up to 850cc will increase from July 1, 2025.

The government has agreed in principle to raise the sales tax rate from 12.5 percent to 15-18 percent in the upcoming budget.

Presently, a lower rate of 12.5 percent sales tax is applicable on locally manufactured or assembled motorcars of cylinder capacity upto 850cc.

Under the proposed Finance Bill 2025-26, the FBR is expected to delete entry number 72 of the Eighth Schedule of the Sales Tax Act 1990 to end the concessionary sales tax regime on the locally manufactured or assembled motorcars.


  • make it more difficult for the middle class to own a car, aik trf kehtay ha EV cars khareeday taak pollution km ho doosri trf fuel efficient cars jo km pollution krti ha as compared to gas guzzlers SUV and cross overs are promoted. No clear policy

  • There are no locally manufactured cars .we don’t have the supply chains

    This is wrong

  • There are assemblers operate in Pakistan. But as the other laws enforced like a “SARAK CHAAP” style this will probably apply too.

  • Greaz decision. More taxes on middle class and small cars. Cars should be reserved for rich people and government should protect the rich at all costs.

  • Main budget kay baad plan kar raha tha car buy karnay ka ai middle class jo apni kamai jor jor kar usko poora karnay ki koshish karta hai humaray mulk main uski koi aukat hi nahi sub say zyada tax bhi salaried middle class day aur tax increase ho to uska burden bhi khud uthai aur phir kahtay hain corruption bar rahi hai, jub tak unjust khatam nahi hoga yehi hota rahayga


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