The price of owning a new Suzuki Alto is increased due to the Federal Board of Revenue’s (FBR) revised withholding tax regime.
Implemented on July 1, 2024, this new tax structure shifts the tax burden based on vehicle value rather than engine capacity, directly impacting Pakistan’s most popular entry-level car.
New Withholding Tax Regime Details
The new regime, introduced in the Finance Act of 2024, aims to streamline tax collection by aligning levies more closely with the value of vehicles. This is a significant departure from the previous tax structure that was based on engine capacity.
The revised rates of withholding tax applicable to new motor vehicles are as follows:
Up to 850 cc: 0.5% of the vehicle’s value
851 cc to 1000 cc: 1% of the vehicle’s value
1001 cc to 1300 cc: 1.5% of the vehicle’s value
1301 cc to 1600 cc: 2% of the vehicle’s value
1601 cc to 1800 cc: 3% of the vehicle’s value
1801 cc to 2000 cc: 5% of the vehicle’s value
2001 cc to 2500 cc: 7% of the vehicle’s value
2501 cc to 3000 cc: 9% of the vehicle’s value
Above 3000 cc: 12% of the vehicle’s value
Increase in Suzuki Alto Prices in Pakistan
For Suzuki Alto buyers, here’s a breakdown of the price increase under the new withholding tax regime:
Suzuki Alto VX: Priced at PKR 2,331,000 (ex-factory), buyers will now pay an additional PKR 11,655 as withholding tax.
Suzuki Alto VXR: Priced at PKR 2,707,000 (ex-factory), the new withholding tax will be PKR 13,535.
Suzuki Alto VXR AGS: Priced at PKR 2,894,000 (ex-factory), the withholding tax will be PKR 14,470.
Suzuki Alto VXL AGS: Priced at PKR 3,045,000 (ex-factory), the withholding tax will be PKR 15,225.
Impact on the Automotive Market
This tax revision is poised to affect the automotive market significantly, particularly entry-level cars like the Suzuki Alto, which is a popular choice among Pakistani consumers.
The increased cost due to the withholding tax could influence purchasing decisions, potentially leading to a shift in market dynamics.
For potential buyers and current car owners, understanding these changes is crucial for making informed purchasing decisions.
The FBR’s move to align taxes with vehicle values rather than engine capacities marks a notable shift in policy, reflecting broader trends in automotive taxation and revenue collection strategies.