Islamabad, June 12, 2025: The federal budget 2025–26 outlines a sharp increase in General Sales Tax (GST) for locally manufactured small-engine vehicles, including the widely sold Suzuki Alto. If approved, the tax rate on these vehicles will jump from 12.5% to 18%.
Additionally, a 1% New Energy Vehicle (NEV) levy will apply to all petrol-powered cars with engine sizes up to 1300cc.
Key Tax Changes
The Federal Board of Revenue (FBR) is set to revoke the concessional GST rate by eliminating the relevant clause from the Eighth Schedule of the Sales Tax Act. Moreover, vehicles with engine capacities up to 850cc will now fall under the default 18% GST bracket.
Impact on Suzuki Alto – Estimated Price Hike
According to Pak Suzuki’s ex-factory prices listed earlier in 2025, the cost of various Suzuki Alto models may rise substantially:
- Base variant: Could see a jump of around Rs. 140,000
- Top variant: May witness an increase nearing Rs. 200,000
| Car Brand | Model | Previous Price (12.5% GST) | New Price (18% GST) | 1% Green Tax | Total Price (After All Taxes & GST) |
| Suzuki | Alto VXR Upgraded | 2,827,000 | 2,965,209 | 29,652 | 2,994,861 |
| Alto VXR AGS Upgraded | 2,989,000 | 3,135,129 | 31,351 | 3,166,480 | |
| Alto VXL AGS Upgraded | 3,140,000 | 3,293,511 | 32,935 | 3,326,446 | |
| Every VX | 2,749,000 | 2,883,396 | 28,834 | 2,912,230 | |
| Every VXR | 2,799,000 | 2,935,840 | 29,358 | 2,965,198 |
READ MORE: New Suzuki Alto Launched in Pakistan With Upgrades
Broader Implications
- Market Effects: The price bump might reduce demand for locally produced small cars, possibly pushing consumers toward imported used vehicles. Government insiders suggest that import regulations may be relaxed to stabilize the market.
- Higher Consumer Expense: Buyers will face significantly increased costs, varying by model.
- Reason Behind the Shift: The move is aimed at standardizing tax structures and improving revenue collection by phasing out selective tax breaks.
