Budget 2025-26: Toyota Yaris, Corolla Expected Prices after New Tax

Budget 2025-26 proposed several taxes on cars over 850cc including Green Tax on locally assembled cars, including Toyota models. This will raise prices of Toyota Corolla Altis by about Rs120,000–150,000.

Sharif led government introduced a series of tax and policy reforms targeting Pakistan’s automotive sector in the newly unveiled Budget 2025–26.

Corolla Altis Expected Prices

Toyota Yaris Expected Prices

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The government has introduced a Green Tax on all internal combustion engine (ICE) vehicles, which includes both imported and locally assembled cars. The aim is to encourage a shift toward electric and alternative fuel vehicles. Cars with smaller engines under 1300cc will now be taxed at 1% of their total value. Mid-sized cars between 1300cc and 1800cc will be taxed at 2%, and larger vehicles with engines above 1800cc will face a 3% tax. For commercial vehicles like buses and trucks, there will be a flat 1% tax regardless of their size or whether they are imported or locally made.

In addition to this, the General Sales Tax (GST) on small cars with engine capacities up to 850cc has been increased from 12.5% to 18%. This change mostly affects the Suzuki Alto, which is currently the only locally manufactured car in this category. Experts believe this will raise the price of the car by around Rs. 163,000 to Rs. 186,000, depending on the model.

The budget also brings in a new Carbon Levy on petroleum products, which will make owning and running vehicles more expensive. This levy will start at Rs. 2.5 per liter in the 2025–26 financial year and will rise to Rs. 5 per liter the year after. The purpose is to cut down on fossil fuel use and raise money for environmentally friendly infrastructure projects.

The car industry, which is already struggling due to high inflation and low customer demand, is likely to face more pressure in the short term because of these new taxes. However, the government says the long-term benefits like less pollution and better energy independence make these tough measures worthwhile.