The Punjab government has introduced a new token tax system for motor vehicles, effective July 2024. Previously, the Excise and Taxation Department collected a fixed annual tax based on engine capacity, with a standard token tax for vehicles up to 1000cc. However, the 2024-25 budget brings a change, with token tax now determined by the vehicle’s invoice price.
For instance, the token tax on motor cars has increased from Rs15,000 to Rs20,000 for the fiscal year 2025. The new structure stipulates that vehicles with engine capacity between 1001cc and 2000cc will incur a token tax of 0.2% of the invoice price. Meanwhile, vehicles with engine capacity between 2001cc and 2500cc, or above, will attract a token tax of 0.3% of the invoice price. This revised policy aims to streamline the token tax system, making it more equitable and revenue-friendly for the provincial government.
This change is expected to impact vehicle owners across Punjab, making it essential for them to be aware of the new token tax rates to ensure compliance and avoid any penalties. With the new system in place, the Excise and Taxation Department aims to increase revenue collection and promote a more transparent taxation process.
