Vehicle owners in Islamabad may soon have to pay higher token tax after a National Assembly committee approved changes to the existing tax structure. The revised rates are aimed at updating a system that has remained unchanged since 2019.
According to the approved proposal, cars with engine capacities of up to 1000cc will now be subject to a one-time fixed token tax of Rs. 10,000. This change is expected to simplify the taxation process for smaller vehicles.
The committee has also proposed a higher tax for older vehicles. Cars manufactured before 2010 will be charged a token tax of Rs. 20,000, regardless of their engine size. The move is reportedly intended to discourage the use of aging vehicles and encourage owners to shift to newer, more efficient models.
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For vehicles ranging from 1000cc to 1300cc, the token tax formula has been revised. Instead of the previous rate of 0.3% of the vehicle’s invoice value, owners will now pay 0.25%. This adjustment could provide some relief to owners of mid-sized vehicles.
Officials noted that Islamabad’s token tax structure had not been revised for nearly seven years, despite significant changes in vehicle prices and market conditions. The updated rates are part of broader efforts to modernize the taxation system and improve revenue collection.
The proposed changes have generated mixed reactions among vehicle owners. Some believe the fixed tax system will make payments easier to understand, while others are concerned about the increased financial burden, especially for owners of older vehicles.
If implemented, the revised token tax structure will affect thousands of vehicle owners in the federal capital. Further details regarding the enforcement date and payment procedures are expected to be announced after final approval from the relevant authorities.
The development marks one of the most significant updates to Islamabad’s vehicle taxation system in recent years.
