Alto Gets Expensive, Lexus Gets Cheaper: Pakistan’s Tax Policy Sparks Debate

Alto Gets Expensive, Lexus Gets Cheaper: Pakistan’s Tax Policy Sparks Debate

The federal budget for 2025–26 has sparked a major debate in the auto sector after changes in taxes and import duties created a surprising gap between small and luxury vehicles. Prices of small cars have increased significantly, while luxury cars have become cheaper. Renowned auto expert and co-founder of PakWheels, Sunil Sarfraz Munj, strongly criticized the current tax policy, stating: “Pakistan has a reverse Robin Hood system. Import duties on luxury cars are reduced for the rich, while taxes on small cars are increased for the poor. The rich get a relief of 20 million rupees, while a small car buyer pays an extra 200,000. Hundreds of Alto buyers are paying the cost of one Lexus.” According to PakWheels, the price of the Suzuki Alto VXL AGS has increased by PKR 186,446, bringing the new price to PKR 3,326,446. In contrast, a significant reduction in import duties has brought down the price of the Lexus LX 600 (2023 model) by PKR 11–12 million. Many consumers are calling this policy economically unjust, arguing that it increases the financial burden on ordinary citizens while offering further relief to the wealthy.