In a recent development, the Punjab government has implemented revised taxes on motor vehicles as part of the budget for 2023-24. These changes involve increased registration and transfer fees, as well as higher withholding taxes.
You must be wondering how much taxes have been increased on cars, bikes, rickshaws and other motor vehicles, right? Let’s see the new rates here.
Revised Transfer Fee on Motorcycles, Cars, & Others
The revised transfer fees for motorcycles, cars, and commercial vehicles are as follows:
| Category | Old Fee (Rs.) | New Fee (Rs.) | Difference (Rs.) | Difference (%) |
| Motorcycle / Scooter | 150 | 500 | 350 | +233% |
| Up to 1000cc / Rickshaw | 1,200 | 2,500 | 1,300 | +108% |
| 1000- 1800 CC | 2,000 | 5,000 | 3,000 | +150% |
| Above 1800CC | 3,000 | 10,000 | 7,000 | +233% |
| COMMERCIAL | 4,000 | 5,000 | 1,000 | +25% |
New Withholding Tax Rates
The revised transfer fees for motorcycles, cars, and commercial vehicles are as follows:
| Engine Capacities | Old Rates (Filer) | Old Rates (Non-Filer) | New Rates (Filer) | New Rates (Filer) |
| Up to 850 | 10,000 | 30,000 | 10,000 | 30,000 |
| 851-1000 | 20,000 | 60,000 | 20,000 | 60,000 |
| 1001-1300 | 25,000 | 75,000 | 25,000 | 75,000 |
| 1301-1600 | 50,000 | 150,000 | 50,000 | 150,000 |
| 1601-1800 | 150,000 | 450,000 | 150,000 | 450,000 |
| 1801-2000 | 200,000 | 600,000 | 200,000 | 600,000 |
| 2001-2500 | 300,000 | 900,000 | 6% of Value | 18% of Value |
| 2501-3000 | 400,000 | 1,200,000 | 8% of Value | 24% of Value |
| Above 3000 | 500,000 | 1,500,000 | 10% of Value | 30% of Value |
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Motor Vehicle Registration and Transfer of Ownership in Pakistan
Other Changes
Here are some other changes in the taxes as per this letter.
- Private vehicles previously subject to a token tax of Rs. 2,500 per seat will now be taxed based on the CC of the vehicles.
- The registration fee for vehicles with engine capacities ranging from 1501cc to 2000cc has been revised downward to 2% from the previous 3%.
The new rates are effective in Punjab from 1-July-2023.
Analysis
The revised tax rates primarily target the elite class, especially with the introduction of higher withholding taxes on vehicles above 2,000cc engine. Non-filers face a significant 3x increase in withholding taxes compared to filers, aiming to encourage greater tax compliance.
The increase in transfer fees (up to 233%) comes as an unexpected blow. This additional fee on the motorcycles, rickshaws, cars, etc. not only impacts the wealthy but also places an additional burden on inflation-hit middle and low-income individuals.
The reduction in registration fees for vehicles with engine capacities between 1501cc and 2000cc brings relief to customers of certain SUVs, such as KIA Sportage, Hyundai Tucson, etc.
The IMF agreement serves as a major reason behind these tax revisions. It remains to be seen how people will react to these changes, and whether the government will achieve its tax targets after implementing them.
Do you think the increase in transfer fees for inflation-hit individuals, attributed to the IMF deal, is justified? Share your opinions in the comment section below.
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