New Token Tax Approved – How Much Will You Pay Now?

Jawad

25 Aug 2025

233

New Token Tax Approved – How Much Will You Pay Now?

The federal government has officially given the green light to a significant vehicle token tax increase 2025 for private, commercial, and public service vehicles registered in Islamabad. This Govt approved vehicle token tax is part of a wider effort to boost revenue collection and streamline the taxation system.

Why the Tax Hike Was Introduced

During a recent cabinet meeting, a proposal from the Ministry of Interior and Narcotics Control was approved, leading to the Federal government token tax hike. Officials explained that token taxes had not been revised since 2019, which created a gap in revenue generation. As a result, many motorists were left asking, “How much token tax now?”

Currently, taxes are still collected under the old West Pakistan Motor Vehicles Taxation Act of 1958, a framework that has remained mostly unchanged for decades. This outdated system restricted the Excise and Taxation Department from meeting revenue goals.

Revenue Collection and Targets

For the fiscal year 2024–25, the Excise and Taxation Department collected Rs. 4.29 billion and set a new target of Rs. 4.5 billion. However, the system’s inefficiency prompted the government to move towards an updated token tax rates Pakistan policy. Many vehicle owners are now concerned about how much token tax Pakistan motorists will be required to pay.

Legislative Amendments

To modernize the system, the ICT Administration (ICTA) prepared the West Pakistan Motor Vehicles Taxation (Amendment) Act, 2025. This amendment introduces new token tax details Pakistan, ensuring updated car token tax rates across different vehicle categories. The reform also aligns with provincial taxation systems to improve transparency and fairness in collections.

Impact on Motorists

With the latest token tax approved 2025, motorists are already reacting strongly. Many describe it as a burden, while others see it as necessary for development. Under the new policy, ICTA will be allowed to keep any revenue beyond the Rs. 4.5 billion target, which will be reinvested in local development projects.

For drivers, the reality is clear: motorists new token tax rates mean higher annual payments. As a result, motorists shocked token tax hike headlines are surfacing across the country.

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