The Punjab government has implemented a significant change to its vehicle taxation system, impacting annual token taxes for cars registered in Punjab. Here’s a breakdown of the key points:
Goodbye Engine Capacity, Hello Invoice Value:
Previously, token tax was determined by engine capacity. Now, it’s based on the vehicle’s invoice value (purchase price).
New Token Tax Rates Punjab:
- Vehicles with an invoice value between PKR 1,000,000 and PKR 2,000,000: 0.2% of invoice value
- Vehicles with an invoice value exceeding PKR 2,000,000: 0.3% of invoice value
Lifetime Token Tax in Punjab for Smaller Cars:
The lifetime token tax for vehicles in Punjab under 1,000cc has increased from PKR 15,000 to PKR 20,000. However, vehicle ownership transfer in Punjab within 10 years of purchase incurs a discount (10% per year).
Expected Impact of Recent Changes in Token Tax Punjab:
- This change is likely to affect used car markets significantly in Punjab.
- Newer, more expensive vehicles may face higher taxes in Punjab.
Rationale Behind the Change in Punjab Token Tax:
- The Punjab government aims to increase tax revenue and promote transparency in vehicle transactions.
Potential Concerns on Punjab Token Tax Changes:
- Increased financial burden on car owners, especially for high-value vehicles.
- Shift in buying behavior towards less expensive options to save on taxes.
Overall, this new token tax system in Punjab introduces a value-based approach, potentially impacting car purchasing decisions and raising tax revenue. However, it also raises concerns about affordability for some car owners.
