The federal government has officially increased the General Sales Tax (GST) on small cars with engine capacities up to 850cc from 12.5% to 18%. This move is expected to impact the prices of popular locally assembled vehicles like the Suzuki Alto and Suzuki Every in Pakistan.

Along with the GST hike, a new Climate Support Levy (CSL) has also been introduced. This tax ranges from 1% to 3%, depending on the engine size and whether the car is locally made or imported. For vehicles like Alto and Every, which fall under 1300cc, the CSL will be 1%. The purpose of this tax is to reduce pollution from petrol-powered vehicles and encourage the use of electric vehicles.

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As a result of both the GST and CSL, Suzuki Alto prices could increase by Rs167,861 to Rs186,446, depending on the variant. For Suzuki Every, the price hike is estimated between Rs163,230 to Rs166,198. These are projected figures, and the final prices will depend on whether Suzuki chooses to pass on the full tax increase to buyers or absorb part of the cost.

In addition, the government has also introduced a carbon tax of Rs2.5 per liter on fuel. This tax directly targets vehicles running on traditional internal combustion engines, aiming to reduce emissions and promote electric vehicles across the country.

The CSL is calculated as a percentage of the total price of the vehicle, including all other taxes and duties. Vehicles under 1300cc are taxed at 1%, those between 1300cc and 1800cc at 2%, and vehicles above 1800cc at 3%. The overall goal of these policy changes is to lower carbon emissions and align Pakistan’s transportation sector with global environmental standards.