The government increases Sales tax from the current 12.5% to 18% for small vehicles. In addition, a new 1% NEV levy would be applied to all petrol-powered cars with engines up to 1300cc. If approved, these changes will significantly increase the purchase price of such vehicles.

Also Read: Budget 2025-26: How much tax will be deducted from your salary now?

The Federal Board of Revenue (FBR) plans to eliminate the reduced GST rate by removing the relevant clause from the Eighth Schedule of the Sales Tax Act. As a result, cars with engine capacities up to 850cc will now fall under the full 18% standard rate.

Impact on Suzuki Alto Prices

According to early 2025 ex-factory pricing from Pak Suzuki, the revised tax could push up prices of the Suzuki Alto by approximately Rs140,000 to nearly Rs200,000, depending on the variant.

Higher Costs for Buyers: Car buyers will face noticeably higher out-of-pocket costs.

Policy Objective: The government is aiming to eliminate tax concessions and increase revenue by standardizing GST across vehicle categories.

Market Repercussions: The price hike may reduce the appeal of locally manufactured cars and shift consumer interest toward imported used cars.

Authorities are reportedly exploring options to relax import policies to counter this trend.