Vehicles move through Islamabad after approval of revised token tax rates.
The National Assembly’s Standing Committee on Finance has approved higher vehicle token tax rates for Islamabad, introducing the first major revision to the system since 2019.
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Officials told the committee that Islamabad had kept vehicle token tax rates unchanged for several years, while provinces had already introduced upward revisions.
According to the Deputy Commissioner of Islamabad Capital Territory, the new framework aims to align Islamabad’s taxation structure with provincial models and strengthen revenue collection.
Revised Tax Structure
Under the updated plan, vehicles up to 1000cc will continue to pay a one-time fixed token tax of Rs10,000.
However, authorities proposed a higher charge for older vehicles. Cars manufactured before 2010 will now face a token tax of Rs20,000.
Meanwhile, officials proposed a reduction for vehicles between 1000cc and 1300cc.
The existing tax rate of 0.3 per cent of invoice value will decrease to 0.25 per cent under the revised structure.
In addition, vehicles manufactured after 2010 will now attract a token tax of Rs6,200 instead of the previous Rs1,500.
Officials explained that a vehicle valued at Rs2 million would generate Rs6,200 in token tax under the updated system.
Revenue Collection Expected to Rise
The committee received projections showing higher annual collections after the revision.
At present, Islamabad generates approximately Rs3.9 billion through vehicle token tax.
However, authorities expect the figure to increase to around Rs5.2 billion once the revised rates take effect.
Officials argued that the increase would improve fiscal capacity and bring Islamabad closer to taxation trends already adopted in other parts of the country.
Lawmakers Raise Concerns
Several committee members questioned the impact of higher taxes on citizens.
Committee member Javed Hanif Khan argued that people already face multiple taxes and warned against adding further financial pressure.
Similarly, Sharmila Faruqi opposed the increase and said middle-income households would carry a larger burden while dealing with rising living costs.
Former foreign minister Hina Rabbani Khar also questioned the annual collection model.
Instead, she suggested introducing longer-term payment options to reduce pressure on vehicle owners and improve efficiency.
Lawmakers further argued that existing collections from road users already support maintenance and infrastructure requirements, raising questions over the need for additional increases.
