Proposed Hike on Vehicle Token Tax Approved

To amend the old policies, the Federal Government has decided an increase in vehicle token tax for private, commercial and public services. The West Pakistan Motor Vehicles Taxation Act, 1958, remained unchanged for several years, but will now experience a major change. Have a look at further information in the blog. 

Reason For the Increase in Vehicle Token Tax

Due to the unchanged law, the Excise and Taxation Department was unable to generate a fair revenue, despite the heavy traffic on the roads. It is estimated that there are 25 million motorcycles, 4.1 million cars, and 1.43 million tractors. This is why the hike was proposed to the government, which solely aims to improve efficiency in tax administration. 

However, it is also important to note that the fiscal year 2024-25 had a target of Rs. 4.5 billion, but could only achieve Rs. 4.29 billion. Hence, the amendment will only help in improving the provincial taxation systems.

Conclusion

To sum up, people might take this increase in the vehicle token tax in the country as a burden, but we are still unaware of how much the increase will be. However, the public transportation, such as buses or rickshaws, might pass these added taxes to the commuters. The approval of the proposed vehicle token taxes is clearly a major shift in the West Pakistan Motor Vehicles Taxation Act, 1958, which remained unammended for years.