The government has approved a new vehicle token tax structure for newly registered vehicles under the Budget 2026–27.
The revised policy introduces a combination of fixed token tax and invoice value-based taxation, with rates varying according to a vehicle’s engine capacity. The new tax structure will apply to newly registered vehicles in Islamabad.
Under the new policy, vehicles with engine capacities of up to 1,000cc will be subject to a fixed annual token tax of Rs. 20,000. For vehicles ranging from 1,001cc to 1,300cc, the token tax has been set at 0.25% of the vehicle’s invoice value.
Meanwhile, vehicles with engine capacities between 1,301 cc and 1,500 cc will also be taxed at 0.25% of the invoice value.
For higher-displacement vehicles, those between 2,001cc and 2,500cc, as well as vehicles above 2,500cc, the token tax has been increased to 0.35% of the invoice value.
The revised token tax structure is expected to take effect following the implementation of the Budget 2026–27 and will apply to newly registered vehicles in Islamabad.
New Vehicle Token Tax Structure as per Budget 2026-27. Up to 1,000cc: Rs. 20,000, 1,001cc – 1,300cc: 0.25% of invoice value, 1,301cc – 1,500cc: 0.25% of invoice value, 1,501cc – 2,000cc: 0.25% of invoice value, 2,001cc – 2,500cc: 0.35% of invoice value, Above 2,500cc: 0.35% of invoice value.
On the other hand, the federal government has placed the transport sector at the centre of its development plan for fiscal year 2026-27, allocating Rs365 billion under the Public Sector Development Programme. The large funding share highlights a clear focus on improving how people and goods move across the country.
Presenting the budget in the National Assembly, Finance Minister Muhammad Aurangzeb said the investment is aimed at strengthening highways, railways and port infrastructure. The goal, he noted, is to support economic growth while also making travel easier, safer and more affordable for the public.
For ordinary commuters and transporters, the plan promises better roads and smoother journeys. For businesses, it could mean faster delivery times and lower freight costs, which may eventually help reduce pressure on prices.
Read more: Rs365 billion transport push set to improve travel, trade across Pakistan
