Punjab Reports Massive Increase in Vehicle Registration

This year, the Excise department reported that there has been an increase of 107,000 vehicle registrations compared to the previous year.

Last year, the department registered over 900,000 vehicles and motorcycles across Punjab, including Lahore.

As a result, the department collected an additional Rs. 2 billion in motor tax this year compared to the previous year.

Recently, The Punjab government has revised its annual token tax policy for vehicles, effective July 1st. The tax will now be based on the vehicle’s invoice value rather than engine capacity. Vehicles with engine capacities between 1,000 and 2,000 cc will incur a tax of 0.2% of the invoice value, while those above 2,000 cc will be taxed at 0.3%. Additionally, the lifetime token tax for vehicles up to 1,000 cc has increased from Rs. 15,000 to Rs. 20,000. When ownership is transferred, the new owner must pay the full token tax again, with a 10% annual discount if the transfer occurs within 10 years of purchase. After 10 years, the lifetime tax no longer applies.

These changes are expected to significantly impact car owners, particularly in the used car market, as newer, more expensive vehicles may face higher taxes. The policy aims to increase tax revenue and promote transparency in vehicle transactions but also places a financial burden on vehicle owners, especially those purchasing high-value vehicles. This may lead to a shift in buying behaviour, with consumers opting for less expensive vehicles to reduce tax costs.