The federal government is considering a proposal to raise the General Sales Tax (GST) on locally assembled vehicles with engine capacities of 850cc or less in the upcoming 2025-26 budget.
The potential hike—from the current 12.5% to 18%—is part of broader revenue-generating strategies being discussed for the new fiscal year. If approved, the increase would notably impact vehicles such as the Suzuki Alto, one of Pakistan’s best-selling compact cars.
Read more: Suzuki Raises Prices For Alto, Cultus, Swift In Pakistan
Authorities are also reviewing a separate proposal to raise levies on all petrol and diesel-powered vehicles to promote the adoption of electric vehicles nationwide.
Current Suzuki Alto Prices (June 2025):
- Alto VXR Upgraded: Rs2,827,000
- Alto VXR AGS: Rs2,989,000
- Alto VXL AGS Upgraded: Rs3,045,000
The federal budget for FY 2025-26 is expected to be announced on June 10.
In parallel, the Federal Board of Revenue (FBR) has suggested a 2% increase in tax rates on interest income from bank deposits and savings schemes. The revision would apply to both filers and non-filers, pushing current rates from 15% to 17% for filers, and from 35% to 37% for non-filers.
These proposals align with IMF recommendations aimed at offsetting revenue losses from concessions to salaried individuals and a contracting formal economy. The final approval is expected to follow IMF consultation.
