The federal government of Pakistan has increased the token tax on cars in the capital, Islamabad.
The National Assembly Standing Committee on Finance and Revenue, on June 21, approved an increase in the token tax on all those cars that are registered in Islamabad.
According to the Deputy Commissioner (DC) of Islamabad, Irfan Nawaz Memon, the hike took place at the time when all other provinces announced an increase in the token tax on cars within their province.
DC Islamabad added that to meet that gap, the standing committee has approved the request to raise the token tax on cars.
As per the new rates approved, the car owners will have to pay a token tax of Rs 10,000 for cars up to 1,000cc.
The owners possessing the car models older than 2010 will have to pay a token tax of Rs20,000.
On the other hand, the token tax first calculated at 0.3% of the vehicle’s invoice value, has been reduced to 0.25% for the cars that range between 1,000cc and 1,300cc.
Read more: Goods transporters lessen fares over drop in petrol price
Punjab govt hikes token tax on cars
The government of Punjab has increased the token tax on cars, announcing a tax reform package in the budget for the year 2026-27.
As per the authorities, the token tax on commercial and large vehicles, which are more than 1,000cc, has been increased after an interval of 20 years.
The car dealers, on the other hand, have been declared a withholding agent for the collection of tax.
As per the new reforms, the car dealers who are dealing unregistered would be declared not eligible for the government contracts, licences, and No Objection Certificates (NOC).
The government moved to this major step to enhance the taxation system of the province and to uplift its economy.
Punjab government increased the token tax on cars after two decades.
In its budget session on June 16, the government has also revised the sales tax rates and enforcement measures across various sectors.
According to the media reports, the new sales tax rates have been increased from 5% to 8%.
The hotels across the province will have to pay a sales tax of 8 per cent from onwards.
While the foreign exchange companies and currency exchangers will have to pay a sales tax of 3 per cent.
Also read: Punjab govt to suspend Metro bus service in Multan on June 22
