The government in Pakistan has surprised everyone by making a big change in how they tax cars. This has caused a lot of talk in the car world. The main change is that now, if a car costs more than Rs. 40 lakhs and has an engine smaller than 1,400cc, it will be taxed at a higher rate – 25%, up from the previous 18%. This has made many people, including experts and car buyers, worried and upset.
The Economic Coordination Committee (ECC) approved this tax change, and economist Ali Khizer explains that it’s because cars over Rs. 40 lakhs are now considered luxury cars. This new tax doesn’t apply to hybrid and electric cars, making things a bit more complicated.
Analyst Abdul Rehman says, “Now, any car over Rs. 40 lakhs is seen as a luxury in Pakistan.” This is a change from before when only cars with engines over 1,400cc had the 25% luxury tax.
Government Quiet, Speculation Rises: Even though the Ministry of Finance confirmed the change, there are still many questions. The details of how it will work and the new rules are not clear. The government officials are not giving much information, making people speculate about what will happen.
This 25% tax will affect many popular car models like Suzuki Cultus VXL, Suzuki Swift, Toyota Yaris, Honda City, and Proton Saga. These cars currently cost between Rs. 4,099,000 and Rs. 5,099,000.
| Model | Brand | Price (Rs.) |
| Suzuki | Cultus VXL | 4,084,000 |
| Suzuki | Cultus Auto Gear Shift | 4,366,000 |
| Suzuki | Swift GL Manual | 4,336,000 |
| Suzuki | Swift GL CVT | 4,654,000 |
| Suzuki | Swift GLX CVT | 5,040,000 |
| Toyota | Yaris GLI MT 1.3 | 4,399,000 |
| Toyota | Yaris ATIV MT 1.3 | 4,659,000 |
| Toyota | Yaris GLI CVT 1.3 | 4,689,000 |
| Toyota | Yaris ATIV CVT 1.3 | 4,899,000 |
| Toyota | Yaris AERO CVT 1.3 | 5,099,000 |
| Honda C | ity 1.2L M/T | 4,699,000 |
| Honda C | ity 1.2L CVT | 4,829,000 |
| Proton | Saga 1.3L Ace A/T | 4,099,000 |
We won’t really know how this tax change will affect things until the government gives more details. Car companies will have to figure out new prices, and buyers will have to wait to see how much more they might have to pay.
What it Means for People and the Economy: This sudden and big tax change is worrying for economists and regular people. People are wondering how it will affect what cars they want to buy, the car industry, and the whole country’s economy. The higher tax might make people less interested in luxury cars, and that could change a lot for local car companies.
As the car industry deals with this unexpected tax change, everyone is waiting for the government to explain how it will work. Let us know what you think about this new 25% tax on cars over Rs. 40 lakhs in the comments below, as Pakistan’s car world gets ready for a big change in luxury cars.
