Motor vehicle owners in the Islamabad Capital Territory (ICT) may face increased token tax charges under the Finance Bill 2026–27, which introduces revised taxation rates based on engine capacity and vehicle invoice value.
According to the proposed structure, vehicles with engine capacities of up to 1000cc will be subject to a fixed token tax of Rs. 20,000. For mid-range vehicles, including those between 1001cc to 1300cc, 1301cc to 1500cc, and 1501cc to 2000cc, the tax will be applied at 0.25 percent of the vehicle’s invoice value.
For larger vehicles, the Finance Bill proposes higher rates, with engine capacities from 2001cc to 2500cc and above 2500cc taxed at 0.35 percent of the invoice value. This change is expected to significantly impact owners of SUVs, sedans, and higher-end vehicles registered in Islamabad.
The bill also outlines separate token tax rates for motor cabs. Vehicles with engine capacity up to 1000cc will pay Rs. 600, while those above 1000cc and up to 1300cc will be charged Rs. 1,000 under the new proposed structure.
For commercial and larger motor cabs, vehicles exceeding 1300cc but not more than 1500cc will be taxed at Rs. 1,700, while those above 2500cc will face a token tax of Rs. 4,200. The Federal Board of Revenue (FBR) has included these revised rates as part of broader efforts to increase revenue from the transport sector.
Officials say the proposed adjustments aim to align vehicle taxation with engine size and market value, though the changes are likely to raise costs for many vehicle owners once implemented.
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