The decision by the Economic Coordination Committee to increase the general sales tax to 25 per cent on locally produced vehicles of 1,400cc and above or priced Rs4 million is expected to result in a decrease in volumes and revenues, according to auto assemblers. The measure is unlikely to generate the expected revenue of Rs4 billion and will only have negative effects on the economy, leading to decreased demand and investor confidence, as well as further price increases for locally assembled cars. Additionally, the government’s decision to keep taxes unchanged on imported used cars is seen as giving negative protection to locally made vehicles, resulting in an increase in the share of used cars in the market. As a result, the Pakistan Automotive Manufacturers Association Director General has urged the finance minister not to burden the local industry with a GST hike. Auto dealers have not yet received any notification regarding the GST hike, but expect a significant drop in sales of locally assembled vehicles in the coming months due to the price increase. Moreover, the import bill of completely knocked down kits has decreased, and the auto sales in the above segment have also remained lower in comparison to the previous fiscal year.