As part of the federal budget 2025–26 discussions, the government is evaluating a proposal to increase taxes on vehicles with engine capacities ranging from 1300cc to 1800cc. If approved, the move will result in a 2% rise in prices across popular mid-sized sedans and compact SUVs, including several top-selling Toyota models.
The proposed tax increase is part of broader fiscal reforms intended to enhance revenue collection without significantly burdening the lowest vehicle segments. However, the 1300cc–1800cc category represents a large share of Pakistan’s automobile market, with many middle-class consumers preferring this segment for its balance of fuel efficiency, power, and value.
Here is a comparison of current and expected prices for select Toyota models after the proposed 2% tax:
| Model & Variant | Current Price (PKR) | Expected Price (PKR) |
|---|---|---|
| Yaris GLI MT 1.3 | 4,479,000 | 4,568,580 |
| Yaris ATIV MT 1.3 | 4,730,000 | 4,824,600 |
| Yaris GLI CVT 1.3 | 4,760,000 | 4,855,200 |
| Yaris ATIV CVT 1.3 | 5,604,000 | 5,716,080 |
| Yaris ATIV X CVT 1.5 (Beige Interior) | 6,215,000 | 6,339,300 |
| Yaris ATIV X CVT 1.5 (Black Interior) | 6,319,000 | 6,445,380 |
| Corolla Altis X Manual 1.6 | 5,969,000 | 6,088,380 |
| Corolla Altis 1.6 X CVT-i | 6,559,000 | 6,690,180 |
| Corolla Altis X CVT-i 1.8 | 6,889,000 | 7,026,780 |
| Corolla Altis 1.6 X CVT-i Special Edition | 7,189,000 | 7,332,780 |
| Corolla Altis Grande X CVT-i 1.8 (Beige Int.) | 7,509,000 | 7,659,180 |
| Corolla Altis Grande X CVT-i 1.8 (Black Int.) | 7,549,000 | 7,699,980 |
This tax revision comes amid an already volatile economic environment marked by inflation, rupee depreciation, and interest rate fluctuations. The mid-size car segment—typically considered aspirational for many middle-income buyers—may now become less accessible. Dealers and analysts anticipate a slowdown in demand in the short term, as potential buyers reevaluate affordability and financing options.
While luxury car owners may remain relatively unaffected, this move could disproportionately impact working professionals and small business owners, for whom a 1300cc–1800cc car is often a family’s primary mode of transportation.
As the government finalizes the 2025–26 budget, industry stakeholders are closely monitoring the proposed tax’s implementation timeline and potential revisions. Automakers may also adjust promotions or introduce revised financing offers to cushion the impact on consumers.
Disclaimer:
The information provided in this article is based on preliminary budget proposals and publicly available data as of June 2025. Vehicle prices and tax rates mentioned are estimates and subject to change following the official approval and implementation of the federal budget 2025–26. Readers are advised to consult with authorized automobile dealers or relevant government departments for the most accurate and up-to-date details. This article is intended for informational purposes only and does not constitute financial, tax, or legal advice.
Afsheen Gohar is a seasoned writer with a wealth of experience in crafting authentic and well-researched articles. Her dedication to delivering high-quality content is evident in her work, where she combines a passion for storytelling with a commitment to accuracy and depth. Afsheen’s writing reflects her ability to engage readers with compelling narratives while providing valuable insights on a diverse range of topics.
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