Proposed Tax Increase on 1300cc–1800cc Vehicles May Lead to Higher Car Prices in Pakistan
As part of the upcoming 2025–26 federal budget discussions, the government is evaluating a proposal to raise taxes on vehicles with engine capacities between 1300cc and 1800cc. If approved, the tax hike would introduce a 2% increase, affecting a wide range of mid-sized cars popular among Pakistani consumers.
Impact on Vehicle Prices
The proposed tax adjustment is expected to lead to a corresponding rise in the prices of several sedans and compact SUVs, potentially increasing the overall cost of ownership for buyers in this segment. Automotive experts note that this category includes many preferred models for daily commuting and family use.
Expected Price Changes for Toyota Vehicles
Toyota is among the automakers likely to be affected. The following table outlines the current and projected prices for popular Toyota models if the 2% tax increase is implemented:
| Model and Variant | Current Price (PKR) | Expected Price (PKR) |
|---|---|---|
| Yaris Sedan GLI MT 1.3 | 4,479,000 | 4,568,580 |
| Yaris Sedan ATIV MT 1.3 | 4,730,000 | 4,824,600 |
| Yaris Sedan GLI CVT 1.3 | 4,760,000 | 4,855,200 |
| Yaris Sedan ATIV CVT 1.3 | 5,604,000 | 5,716,080 |
| Yaris Sedan ATIV X CVT 1.5 (Beige Interior) | 6,215,000 | 6,339,300 |
| Yaris Sedan ATIV X CVT 1.5 (Black Interior) | 6,319,000 | 6,445,380 |
| Corolla Altis X Manual 1.6 | 5,969,000 | 6,088,380 |
| Corolla Altis 1.6 X CVT-i | 6,559,000 | 6,690,180 |
| Corolla Altis X CVT-i 1.8 | 6,889,000 | 7,026,780 |
| Corolla Altis 1.6 X CVT-i Special Edition | 7,189,000 | 7,332,780 |
| Corolla Altis Grande X CVT-i 1.8 (Beige Interior) | 7,509,000 | 7,659,180 |
| Corolla Altis Grande X CVT-i 1.8 (Black Interior) | 7,549,000 | 7,699,980 |
Market Outlook and Consumer Considerations
Pakistan’s automotive sector has already seen several pricing shifts in recent years, influenced by currency fluctuations, global inflation, and previous tax revisions. Industry analysts suggest that another price increase could influence consumer behavior, especially for middle-income buyers who commonly choose cars in the 1300cc to 1800cc range.
While the proposed tax is still under review, prospective car buyers may consider planning their purchases ahead of potential price changes.
