ISLAMABAD – Pakistani government announced to withdraw the proposed surge in sales tax on entry-level cars and hybrid vehicles in light of strong resistance from Senate Standing Committee on Finance and Revenue during talk on Budget 2025.
Finance Bill suggested increasing GST on several cars, and a separate proposal aimed to increase sales tax on hybrid vehicles up to 1800cc from 12.5percent to 18percent. The proposed measures triggered immediate backlash from parliamentarians, environmental advocates, and consumers alike.
Senators shared views against 18% tax on entry-level cars like Alto, expressing concerns, recommending that if a hike was necessary, it should be limited to 14- 15 percent.
Members of the upper house of parliament further called this inequitable, pointing out that while tax incentives were being granted in some sectors, small car buyers—largely from the middle class—were being unduly burdened.
The collective opposition led to policy reversal as the government officially announced that the sales tax on small vehicles and hybrid cars would remain unchanged. The move aligns with Pakistan’s current auto policy, which does not allow any increase in hybrid vehicle taxes before June 2026.
Suzuki Alto Expected Price after 18pc GST on cars in Budget 2025-26
