Car Prices Likely to Drop in Pakistan: Budget 2025-26 May Bring Relief for Consumers

ISLAMABAD – Good news may be on the horizon for car buyers in Pakistan, as the federal government considers reducing taxes and duties on vehicles and auto parts in the upcoming Budget 2025-26. If approved, these measures could lead to a noticeable drop in car prices across the country.

Sources suggest that the national budget is expected to be presented on June 2, though the final date will be confirmed after consultation with the International Monetary Fund (IMF).

As per reports, a proposal is under review to cut existing duties on vehicles by up to 20 per cent, which currently range from 15 to 90 per cent depending on the type and category. Additionally, the 2 per cent extra customs duty on auto parts may be removed entirely. Authorities are also evaluating a gradual reduction in the 4 to 7 per cent tax slab applied to imported vehicles and components.

Should these changes be implemented, popular imported models such as Suzuki, Toyota Vitz, Daihatsu Mira, and Honda Vezel are expected to become significantly more affordable for Pakistani consumers.

The budget may also bring broader tax relief to various sectors. The government is reportedly examining the possibility of lowering duties on raw materials and semi-finished goods used in industries like textiles, chemicals, plastics, iron, and steel.

With a revenue target of Rs 14,305 billion for the upcoming fiscal year, the government aims to collect an additional Rs 600 billion through better enforcement and Rs 400 billion through new policy measures.