How Budget 2025 Hits Small Car Buyers

Jawad

11 Jun 2025

162

How Budget 2025 Hits Small Car Buyers

In the latest Budget 2025 Car tax update, the federal government has introduced a hidden car tax in the form of a 1% NEV (New Energy Vehicle) Adoption Levy. This tax targets petrol-powered vehicles with engine capacities ranging from 660cc to 1300cc. The new tax on vehicles is expected to influence both car pricing and consumer purchasing trends significantly.

Auto Tax Increase Leads to Car Price Hike

This auto tax increase will be applied to the ex-factory price of affected vehicles, causing a modest yet noticeable car price hike. Many small and mid-range car models, popular among middle-class buyers in Pakistan, will now become slightly more expensive under this policy. The budget impact on cars prices is expected to add financial pressure to those already struggling with inflation.

Expected changes in car prices are outlined below:

Vehicle Model	Current Price (₨)	Expected Price (₨)
Suzuki Alto VXR	2,827,000	2,855,270
Suzuki Alto VXR AGS	2,989,000	3,018,890
Suzuki Alto VXL AGS	3,140,000	3,171,400
Suzuki Cultus VXR	4,230,000	4,272,300
Suzuki Cultus VXL	4,316,000	4,359,160
Suzuki Cultus AGS	4,618,000	4,664,180
KIA Picanto 1.0 AT	3,940,000	3,979,400
Honda City 1.2L M/T	4,649,000	4,695,490
Honda City 1.2L CVT	4,689,000	4,735,890
Peugeot 2008 Active	6,600,000	6,666,000
Peugeot 2008 Allure	7,250,000	7,322,500

Purpose Behind the New Car Tax

Government officials state that this new car tax is aimed at supporting the development of electric vehicle (EV) infrastructure. The revenue generated from this budget car tax update will be directed toward EV charging stations and sustainable transportation initiatives. By taxing internal combustion engine (ICE) cars, the policy attempts to nudge consumers toward cleaner alternatives.

Reactions to the Budget Car Tax Update

This latest car tax news has sparked concern among potential car buyers, especially those in the middle-income segment. Critics argue that the hidden car tax puts additional pressure on consumers who rely on budget-friendly petrol vehicles. However, proponents believe it is a necessary step toward a greener future.

Budget 2025 Car tax hidden car tax budget impact cars prices tax on vehicles new car tax car tax news auto tax increase budget car tax update car price hike

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