Big News! New Auto Budget Brings Tax Shake-Up – Suzuki Alto Sees Major Price Hike
The latest 2025–26 budget for the auto sector introduced several tax adjustments that are already impacting vehicle prices in Pakistan. While some local manufacturing costs have been reduced, certain cars—especially hybrids and compact models—are becoming noticeably more expensive.
Reduced Taxes: Made-in-Pakistan Benefit
- The import duty on imported engines has been lowered by 5%.
- CKD (Completely Knocked Down) kits, used in local vehicle assembly, now have a 15% import duty (down from 20%).
These cuts aim to help local assemblers build cars more cheaply.
Tax Increases and Price Spikes
But not everything is getting cheaper:
- Due to a rise in sales tax, the Suzuki Alto 660cc now costs up to PKR 150,000 more.
- Hybrid cars have seen their tax jump from 8.5% to 18%, adding between PKR 850,000 to 1.4 million to their final price.
- A top auto expert warned that these increases may hurt the local auto industry—even though some import duties have been lowered.
As one industry expert explained: “While lower duties help industry, rising sales tax on compact and hybrid cars could push up the country’s import bill and harm local manufacturers. ”
What It Means for Buyers
- Buyers of locally assembled cars like the Suzuki Alto now face significantly higher prices.
- The aim is to support local manufacturers, but some feel the higher taxes on smaller and eco-friendly cars are working against this goal.
Final Takeaway
The 2025–26 auto budget sends mixed signals: while it supports local production with some lower duties, it also raises the cost of smaller and hybrid cars through higher sales taxes. The long-term impact on buyers and the local auto industry will depend on how these mixed policies play out in the coming months.
