ISLAMABAD: The government is contemplating a substantial rise in withholding tax on new car purchases. Proposed changes are not limited to a flat increase but a percentage-based hike affecting every car, including those up to 850cc.
Currently, cars with an engine capacity of up to 850cc enjoy a reduced sales tax rate of 10% to 12.5%.
However, the finance minister said that the federal government has proposed the standard sales tax (GST) on locally assembled small-engine cars and bringing these vehicles under the standard 18% sales tax bracket.
Using ex-factory price data provided by Pak Suzuki in early 2025, the price of the car could significantly increased, potentially anywhere between Rs. 120,000 to close to Rs. 180,000 for the higher end variant.
The automotive industry, already struggling with sluggish sales due to rampant inflation, may encounter further hurdles. Despite offering various incentives and deals to attract buyers, the potential tax increase could deal another blow to an industry already facing challenges, exacerbating the country’s economic difficulties.
Suzuki Alto New Price in Pakistan
| Variant | Price (12.5% GST) | Price (18% GST) |
| Alto VRX | 2,827,000 | 2,965,209 |
| Alto VRX AGS | 2,989,000 | 3,135,129 |
| Alto VXL AGS | 3,140,000 | 3,293,511 |
