Pak Suzuki Motor Company has issued a strong warning to the government regarding the potential impact of a proposed increase in General Sales Tax (GST) in the upcoming fiscal year 2025-26 budget. The company fears that this tax hike could lead to a significant decline in auto industry sales, adversely affecting both original equipment manufacturers (OEMs) and their vendors.

According to Pak Suzuki Managing Director Hiroshi Kawamura, an 18% GST would not only impact vehicle prices, making them less affordable and dampening market demand, but also negatively affect employment across the entire automotive value chain. Kawamura emphasized that economic growth was sustainable with a 12% sales tax and that any further increase would create challenges for the entire auto industry. Currently, the automobile sector supports approximately 2.5 million direct and indirect jobs, a number that could potentially increase if the 12.5% GST rate were maintained.

Kawamura conveyed these concerns during a meeting with Haroon Akhtar Khan, Special Assistant to the Prime Minister on Industries. He specifically highlighted worries over the proposed increase in sales tax on vehicles below 850cc engine capacity from 12.5% to 18%, warning that such measures could impede industry growth and pressure production.

In response, the Prime Minister’s aide reaffirmed the government’s commitment to supporting the auto industry, stressing Prime Minister Shehbaz Sharif’s dedication to the sector’s growth and awareness of its challenges. He assured that the government would not allow the sector to falter and pledged continued engagement with industry stakeholders to navigate challenges and seize growth opportunities.

In a separate discussion with Master Changan Motors CEO Danial Malik, strategic challenges and budgetary implications for the auto industry were discussed. Both emphasized the national priority of transitioning to New Energy Vehicles (NEVs), particularly electric vehicles. Malik called for sustained policy support and industry-friendly measures to foster a stable and growth-oriented environment.

Haroon Akhtar reiterated the government’s commitment to implementing a sustainable and modern auto policy aligned with global trends, announcing that an Electric Vehicle (EV) policy would be unveiled soon. He stated that the Prime Minister envisions a globally competitive auto industry, and the upcoming EV policy would provide a comprehensive framework for infrastructure development, investment incentives, and policy facilitation. Special incentives are expected to promote EV adoption, supporting long-term industrial growth and environmental sustainability. Pak Suzuki Motor Company has issued a strong warning to the government regarding the potential impact of a proposed increase in General Sales Tax (GST) in the upcoming fiscal year 2025-26 budget. The company fears that this tax hike could lead to a significant decline in auto industry sales, adversely affecting both original equipment manufacturers (OEMs) and their vendors.

According to Pak Suzuki Managing Director Hiroshi Kawamura, an 18% GST would not only impact vehicle prices, making them less affordable and dampening market demand, but also negatively affect employment across the entire automotive value chain. Kawamura emphasized that economic growth was sustainable with a 12% sales tax and that any further increase would create challenges for the entire auto industry. Currently, the automobile sector supports approximately 2.5 million direct and indirect jobs, a number that could potentially increase if the 12.5% GST rate were maintained.

Kawamura conveyed these concerns during a meeting with Haroon Akhtar Khan, Special Assistant to the Prime Minister on Industries. He specifically highlighted worries over the proposed increase in sales tax on vehicles below 850cc engine capacity from 12.5% to 18%, warning that such measures could impede industry growth and pressure production.

In response, the Prime Minister’s aide reaffirmed the government’s commitment to supporting the auto industry, stressing Prime Minister Shehbaz Sharif’s dedication to the sector’s growth and awareness of its challenges. He assured that the government would not allow the sector to falter and pledged continued engagement with industry stakeholders to navigate challenges and seize growth opportunities.

In a separate discussion with Master Changan Motors CEO Danial Malik, strategic challenges and budgetary implications for the auto industry were discussed. Both emphasized the national priority of transitioning to New Energy Vehicles (NEVs), particularly electric vehicles. Malik called for sustained policy support and industry-friendly measures to foster a stable and growth-oriented environment.

Haroon Akhtar reiterated the government’s commitment to implementing a sustainable and modern auto policy aligned with global trends, announcing that an Electric Vehicle (EV) policy would be unveiled soon. He stated that the Prime Minister envisions a globally competitive auto industry, and the upcoming EV policy would provide a comprehensive framework for infrastructure development, investment incentives, and policy facilitation. Special incentives are expected to promote EV adoption, supporting long-term industrial growth and environmental sustainability.