Islamabad, 14 June 2025: A proposed 2% Vehicle Tax Increase in the upcoming 2025–2026 budget is expected to trigger a rise in prices of mid-range passenger vehicles, particularly those with engine displacements between 1300cc and 1800cc.
Automotive industry analysts anticipate that the revised taxation could substantially impact pricing structures for popular models especially those under the Honda brand.
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The anticipated changes come amid broader fiscal reforms aiming to enhance revenue through indirect taxation. The 2% Vehicle Tax Increase is set to influence a wide range of variants in the local market, including both sedans and crossover SUVs.
Projected Price Adjustments for Honda Models
| Model Variant | Current Price (PKR) | Estimated New Price (PKR) |
| Civic Oriel | 8,659,000 | 8,832,180 |
| Civic RS | 9,899,000 | 10,096,980 |
| City 1.5L CVT | 5,439,000 | 5,547,780 |
| City 1.5L ASPIRE M/T | 5,649,000 | 5,761,980 |
| City 1.5L ASPIRE CVT | 5,849,000 | 5,965,980 |
| BR-V i-VTEC S | 6,299,000 | 6,424,980 |
| HR-V VTi | 7,649,000 | 7,801,980 |
| HR-V VTi-S | 7,899,000 | 8,056,980 |
The Honda Civic RS is projected to rise by nearly PKR 198,000, while the Civic Oriel may see an increase of around PKR 173,000. Compact sedans like the City series and compact SUVs such as the HR-V are also expected to reflect similar upward pricing trends.
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This 2% Vehicle Tax Increase initiative is part of a broader governmental strategy to widen the tax net while keeping direct taxes minimal. Consumers planning to purchase vehicles within this engine range may experience a financial pinch, especially in light of prevailing inflation and declining purchasing power.
Industry experts believe that while the new levy could boost state revenue, it may also reduce demand for locally assembled cars, creating ripple effects across the automotive supply chain.
