KARACHI: According to a local media report, amidst Pakistan’s economic challenges such as soaring inflation and bleak financial indicators, Pak Suzuki Motor Company (PSMC) has raised the prices of its Swift GLX CVT model. Effective from March 8, the price of this variant will see a surge of 6.3%, equivalent to Rs304,000, bringing the cost to consumers to Rs5.429 million, up from the previous Rs5.125 million.
The company attributes this price hike to the increased sales tax imposed by the government on locally assembled vehicles. On March 8, the government raised the sales tax from 18 to 25% for vehicles with an invoice price (excluding sales tax) exceeding Rs4 million.
This marks the second price increase for the Swift GLX CVT variant in a month. On March 1, the company had already raised its price by Rs85,000 due to inflation, escalating overhead costs, and rising international raw material and freight charges.
The decision to impose a 25% general sales tax (GST) on all locally manufactured vehicles priced above Rs4 million or with an engine capacity above 1400cc or double cabin was approved by the Economic Coordination Committee (ECC) and the federal cabinet during the tenure of the former caretaker government. This move faced criticism from Pakistan’s auto manufacturers, who argue that it unfairly burdens domestic car makers while sparing importers of used cars.
The Federal Board of Revenue (FBR) estimates an annual collection of Rs4 to Rs4.5 billion through these taxation measures. The FBR’s directive imposes a 25% GST on all vehicles above 1400cc and adds the condition that vehicles with a price exceeding Rs4 million are also subject to the increased tax rate.
