The federal government is once again moving to increase the sales tax on locally manufactured or assembled motorcars with engine capacity up to 850cc, top-level sources confirmed to ProPakistani.
Last week, the government had initially rejected the proposal to hike the sales tax on small cars.
According to senior officials familiar with the matter, earlier directives to raise the sales tax from the current 10–12.5% to a higher slab of 15–18%, originally shelved during internal budget deliberations, have now been revived for inclusion in the Finance Bill 2025.
The decision has been taken to boost revenue generation in the face of mounting fiscal pressures ahead of the FY 2025-26 budget.
While small cars have historically benefited from lower tax rates to promote affordability for middle-income consumers, the proposed hike signals a shift in fiscal priorities.
Stay Connected with ProPakistani
Get the latest automobile news, car launches, bike reviews, videos and analysis wherever you prefer.
Add ProPakistani to Preferred Sources and see more of our stories in Google Search and Top Stories.
Eid kay din to chutti day do apnay employees ko. Itna na exploit karo inko.
Ameer ke gari susti aur gareeb ko cheeeel do – blame IMF but it’s govt to decide to give relief to poor “ameer” of Pakistan. Sad reality
When price of Little car like Suzuki Alto is almost equivalent to that a good Mercedes in other countries, I wonder where money is going.
Is it the government that is earning 300% to 400% duties and taxes or the assemblers making super normal profits? Has anyone given a thought.
Extremely sad state of affairs. I wonder why our Finance Ministery and his Ministry spends this much time on budget, even a little school going child can prepare a way better budget.
Most Politicians, senior government officers or Army officers drive Alto or small 660 cc cars. So why they should care?.