Sunday, June 15, 2025

New Vehicle Taxes Spark Significant Price Increases in Local Car Market

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The federal government has introduced new vehicle taxes in the latest budget, resulting in significant price hikes for locally manufactured cars.

The revised withholding tax rates affect different vehicle categories.

For cars up to 850 cc, such as the Alto VXR, the tax now stands at 0.50% of the price, totaling Rs 12,500, up from Rs 10,000 previously. Vehicles ranging from 851 cc to 1,000 cc will face a 1% tax, amounting to Rs 38,580 compared to the earlier Rs 20,000.

Cars in the 1001 cc to 1300 cc range will incur a 1.50% tax, resulting in Rs 56,985, an increase from Rs 25,000. Vehicles from 1301 cc to 1600 cc now have a 2% tax rate, totaling Rs 81,585, up from Rs 50,000. This means models like the Honda City will cost an additional Rs 31,000.

For cars between 1601 cc and 1800 cc, the tax has risen to 3%, amounting to Rs 225,270, compared to the previous Rs 150,000, resulting in a Rs 75,000 increase for vehicles like the Toyota Grandi. Cars from 1801 cc to 2000 cc now face a tax of Rs 100,720, while those over 3000 cc see a tax rise to Rs 1,139,880.

In addition, MG has adjusted its prices according to the new tax structure. For instance, the price


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