The federal government has officially approved an increase in vehicle token tax across Pakistan after the federal cabinet sanctioned amendments to the West Pakistan Motor Vehicles Ordinance. The move, aimed at modernizing revenue collection and enhancing administrative efficiency, will apply to all categories of vehicles, including private, commercial, and public transport.
Along with token tax adjustments, the government is also considering revising registration and transfer fees to align with current economic and administrative requirements.
According to the decision, the authority to regulate and adjust these fees has been placed under the jurisdiction of the Ministry of Interior. Officials from the ministry highlighted that token tax rates had not been updated since 2019, creating significant challenges in maintaining operational efficiency, particularly within the Chief Traffic Officer’s office.
This stagnation in tax rates not only affected the government’s capacity to generate adequate revenue but also limited resources available for traffic management and enforcement mechanisms.
The federal cabinet’s decision follows the recommendations of the Cabinet Committee for Legislative Cases (CCLC), which had earlier examined the proposed changes and endorsed them. By giving formal approval, the cabinet has paved the way for a nationwide implementation of revised token tax and associated charges.
Authorities believe that this step will improve compliance, enhance accountability, and provide the government with greater financial space to address rising administrative and infrastructural needs in the transport sector.
Officials also emphasized that the updated structure is expected to simplify procedures for motorists while enabling the government to strengthen its digital record-keeping of vehicle registration and transfers.
The reform is viewed as part of broader efforts to modernize Pakistan’s tax system and reduce leakages in revenue collection. While the decision may place an additional financial burden on vehicle owners, the government maintains that the revision was long overdue and necessary to meet the demands of a growing transport network.
