Budget 2025-26: New tax rates for 1300cc, 1500cc, and 1800cc cars in Pakistan

The federal government has added a new tax on petrol and diesel vehicles in the Budget 2025-26. This tax applies to all petrol-powered cars, whether made in Pakistan or imported.

The goal is to increase revenue and also push people toward using cleaner vehicles like hybrids and electric cars.

The tax amount depends on the engine size of the vehicle. Here is the simple breakdown:

• Cars under 1300cc will be taxed 1%

• Cars between 1300cc and 1800cc will be taxed 2%

• Cars above 1800cc will be taxed 3%

• All imported cars, regardless of engine size, will also be taxed 1%

The tax will be collected from the companies that make or import the cars, but prices are expected to rise for buyers as a result.

Experts say this tax could make expensive or imported cars cost a lot more. Car sales might slow down for a while, but this step may also lead to more interest in hybrid and electric vehicles. Still, experts warn that without proper EV charging stations and support, this move could create more challenges for the auto market.

In short, buying a new petrol or diesel car in Pakistan might get more expensive starting July 2025.

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