The Pakistani government has recently revised its tax policy for vehicles like the Honda City, shifting from fixed amounts based on engine capacity to a withholding tax calculated on the invoice price.
This adjustment, implemented in the fiscal year 2024-25 budget, has led to significant price increases for models such as the Honda City.
The Honda City, a popular choice known for its reliability and performance, now features a new pricing structure. Equipped with modern amenities like push-button start, keyless entry, automated temperature control, and advanced safety features such as airbags and anti-lock braking system (ABS), it remains highly regarded among car buyers in Pakistan.
Previously, taxes were imposed based on engine capacity, but now, withholding tax rates vary depending on the vehicle’s invoice price.
For example, vehicles with engine capacities between 1001cc to 1300cc are subject to 1.5% withholding tax for filers and 4.5% for non-filers. For engines between 1301cc to 1600cc, these rates increase to 2% for filers and 6% for non-filers.
The revised tax rates have resulted in new prices for Honda City variants, such as the 1.2LS MT, 1.2LS CVT, 1.5LS CVT, and 1.5LAS CVT.
For filers, prices now range from 4,749,185 PKR to 5,996,580 PKR, while non-filers face higher costs, ranging from 4,889,555 PKR to 6,231,740 PKR.
This change aims to align tax collection more closely with the actual value of vehicles, reflecting a shift in governmental fiscal policy toward greater revenue generation from the automotive sector.
