Punjab Govt to Eliminate Luxury Tax on High-End Vehicles

In a bid to increase the registrations of high-end vehicles in the province, the government of Punjab has decided to abolish luxury tax on such vehicles.

According to the report, to avoid paying extra taxes, owners of these high-end vehicles and trucks get their vehicles registered from other provinces i.e. Islamabad, where luxury tax is not implemented.

While talking to the media, the issue was addressed by Provincial Excise and Taxation Minister, Hafiz Mumtaz. He said that the authority will initially slash the tax and will aim to completely eliminate it by May 2019.

This is indeed a much-needed step from the government of Punjab as it was previously charging Rs. 3 to 5 lac from high-end vehicle owners in the form of luxury tax.

Here is the breakdown of luxury tax on vehicles in Pakistan:

Vehicles Previous Tax Rate Current Tax Rate
1300 to 1500cc Rs. 70,000 Rs. 15,000
1500 to 2000cc Rs. 100,000 Rs. 25,000
2000 to 2500cc Rs. 200,000 Rs. 100,000
Over 2500cc Rs. 300,000 Rs. 300,000

Hafiz further said that once the issue is resolved, it will ultimately see more vehicles being registered in Punjab and help increase the revenues.

Additionally, it remains to be seen whether the Punjab government also abolishes or reduces the price of lifetime token fees or not, which was also increased under their 2018-19 budget for 1000cc cars and motorcycles.

The 1000cc lifetime tokens were increased from Rs. 10,000 to Rs. 15,000 whereas the motorcycle lifetime tokens were increased to Rs. 15,000 from Rs. 12,000.

Sports Analyst & Head of Sports Desk.

  • Great decision. PTI is the real representative of the rich people in Pakistan. PMLN tried to tax the rich and even put luxury tax on the high end vehicles. But PTI has reversed it and has given the due rights to the rich and powerful of Pakistan.
    Now the rich people has a voice and someone takes care of such marginalized community of our country. Imran Khan Zindabad.

  • not a good decision.vehicles above 1500 cc should’ve been taxed even more bcz they are already owned by rich people and vehicle
    tax was a bit intense on 1300cc cars but 15000 is really less

  • It was a very difficult decision. Should they ask Islamabad (which is also rules by the same Party) to increase Tax on Luxury Vehicles, thus giving the opportunity to those who are willing to spend 10-20 Million on a vehicle, to pay about 1% of the cost as Luxury Tax, or give them relief. They decided relief is due, when you can easily increase Sales Tax on Petrol, increase cost of electricity and Gas, why bother these Ultra rich with these petty taxes.

    On a side note; the only reason one would drive Latest model Audi or BMW on Muree road, is to have the satisfaction of showing off that you can afford it. So, paying 1% extra or even 10% extra wouldn’t have raised an eyebrow.

  • What if there’re no taxes. cars will be much more affordable. there must be a special segment where there’s not custom and other charges are not deducted as tax. and yes you can tax the luxury but what about improving living standard of normal folk. these little things can change the country’s outlook a lot and it has psychological effects to.

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