Non-Filers To Be Restricted from Purchasing Cars
In the Federal Budget 2025–26, the government has announced several new measures aimed at improving tax collection and bringing more people into the formal economy. One of the most significant proposals is to stop non-filers from buying vehicles in Pakistan.
The government is making efforts to expand the country’s tax base. Finance Minister Muhammad Aurangzeb, while presenting the budget in the National Assembly, announced that only those who file their tax returns and submit their wealth statements will be allowed to carry out formal financial transactions — including the purchase of vehicles.
This move is intended to encourage tax compliance and improve documentation in the economy. If implemented, it would be one of the strictest steps taken so far to push people toward joining the tax system.
The New Green Tax
That’s not all the budget brought to the table. Say hello to the Green Tax — a new levy on vehicles aimed at promoting eco-consciousness and, yes, collecting a bit more revenue.
Here’s how it breaks down:
- Smaller Local Engines (Under 1300cc): For locally assembled or manufactured cars with an engine under 1300cc, the manufacturer will pay a 1% levy on the car’s value. For example, on a car pricing Rs. 100,000, Rs. 1,000 will be added as tax. The same applies to imported vehicles.
- Mid-Range Local Engines (1300cc to 1800cc): Cars with engines between 1300cc and 1800cc, whether locally made or imported, will face a 2% levy. This means manufacturers will pay 2% of the vehicle’s value.
- Larger Local Engines (Over 1800cc): For cars with engines over 1800cc, the manufacturer will pay Commercial vehicles like buses and trucks, whether locally assembled or imported, will be subject to a 1% levy on their price, paid by the manufacturer. A 3% levy of its price value, whether locally assembled or imported.
- Local Buses and Trucks: If you file your taxes and are part of the formal economy—great! You’re in the clear. But if you’ve been avoiding the tax net, this could seriously limit your options when it comes to buying a new ride.
And for everyone else, the Green Tax might mean slightly higher prices for new vehicles, depending on how much of that cost manufacturers pass on to buyers.
Is banning non-filers from buying cars the right way to go? Will the Green Tax help or hurt car buyers and the environment? Tell us your thoughts in the comments! We’d love to hear what you think about these big changes.