The number of vehicles on roads is increasing year on year as auto-financing through banks has made owning a vehicle easier. The data shows that auto-financing in Pakistan had reached 353.64 billion PKR in November of 2021. Data shared by the All Pakistan Automotive Manufacturers Association (APAMA) shows that vehicle sales have grown 96 percent in December 2021 when compared to December 2020. Therefore, Graana.com, Pakistan’s smartest property portal, takes a look at the tax on cars in Pakistan.
Taxes Applicable on Vehicles in Pakistan
The following are some of the taxes charged on private and commercial vehicles in Pakistan:
Income Tax on Cars in Pakistan
When you own a vehicle, you must pay a set percentage of your income tax. In Pakistan, the rate of income tax on vehicle registration varies, depending on whether you file or not.
| Engine Capacity | Filers (PKR) | Non-Filers (PKR) |
| Below 1000cc | 10,000 | 20,000 |
| 1000-1199 cc | 1,500 | 3,000 |
| 1200-1299 cc | 1,750 | 3,500 |
| 1300 cc | 2,500 | 5,000 |
| 1301-1499 cc | 2,500 | 5,000 |
| 1500 cc | 3,750 | 7,500 |
| 1501-1599 cc | 3,750 | 7,500 |
| 1600-1999 cc | 4,500 | 9,000 |
| 2000 cc | 10,000 | 20,000 |
| 2001-2500 cc | 10,000 | 20,000 |
| Above 2500 cc | 10,000 | 20,000 |
Token Tax on Cars in Pakistan
A particular amount of tax must be paid annually for the issuing of a token that legally certifies a vehicle to be on the road. Let’s take a look at the current token tax rates in Pakistan, as per the 2019-20 budget.
| Engine Capacity | Tax |
| Motorcycle | 1,500 |
| Below 1000cc | 1,500 |
| 1000-1199 cc | 1,800 |
| 1200-1299 cc | 1,800 |
| 1300 cc | 1,800 |
| 1301-1499 cc | 6,000 |
| 1500 cc | 6,000 |
| 1501-1599 cc | 9,000 |
| 1600-1999 cc | 9,000 |
| 2000 cc | 9,000 |
| 2001-2500 cc | 12,000 |
| Above 2500 cc | 15,000 |
Withholding Tax on Cars in Pakistan
Let’s have a look at the current rates of withholding tax in Pakistan on automobile registration (for filers and non-filers).
| Engine Capacity | Filer | Non-Filer |
| Below 850 cc | 7,500 | 15,000 |
| 851-1000 cc | 15,000 | 30,000 |
| 1001-1300 cc | 25,000 | 50,000 |
| 1301-1600 cc | 50,000 | 100,000 |
| 1601-1800 cc | 75,000 | 150,000 |
| 1801-2000 cc | 100,000 | 200,000 |
| 2001-2500 cc | 150,000 | 300,000 |
| 2501-3000 cc | 200,000 | 400,000 |
| Above 3000 cc | 250,000 | 450,000 |
Motor Tax on Cars in Pakistan
The motor tax is one of the most important type of car tax in Pakistan. It may vary between private and commercial cars. The table below contains information on the current motor tax rates in Pakistan.
Motor Tax for Commercial Vehicles
Details of motor tax charged from commercial vehicles in Pakistan are given below:
| Loading Capacity | Tax |
| Upto 4060 kg | 1,000 |
| 4060-8120 kg | 2,200 |
| 8120-12000 kg | 4,000 |
| 12000-16000 kg | 6,000 |
| Above 16000 kg | 8,000 |
Motor Tax for Private Vehicles
details of motor tax charged from private vehicles in Pakistan are given below:
| Type of Vehicle | Tax |
| Hatchback, Sedan, SUV | 2,500 |
| Bus, Station Wagon | 300 |
Professional Tax on Cars in Pakistan
The professional tax rate remains the same for all of the vehicles indicated above.
Professional Tax Rate: PKR 200
Federal Budget 2022-23
Non-filers are subject to a 200 percent advance tax on the purchase of autos with engine displacements greater than 1600cc.
This decision is expected to have an impact on the demand for a variety of vehicles in Pakistan. Customers will have to pay the following advance tax for locally produced ‘luxury cars’:
| Vehicle | Engine Capacity (cc) | Previous Tax | New Tax |
| Corolla Altis | Below 1,800 | 150,000 | 300,000 |
| Hyundai Elantra | Below 2,000 | 200,000 | 400,000 |
| Hyundai Tucson | Below 2,000 | 200,000 | 400,000 |
| Hyundai Sonata | Below 2,000 | 200,000 | 400,000 |
| DFSK Glory | Below 1,800 | 150,000 | 300,000 |
| Kia Sportage | Below 2,000 | 200,000 | 400,000 |
| BAIC BJ40 | Above 2,000 | 200,000 | 400,000 |
| Hyundai Sonata 2.5 | Below 2,500 | 300,000 | 600,000 |
| Kia Sorento | Below 2,400 | 300,000 | 600,000 |
| Toyota Fortuner | 2,700-2,800 | 400,000 | 800,000 |
| Toyota Hilux | Below 2,800 | 400,000 | 800,000 |
| Isuzu D-Max | 3,000 | 400,000 | 800,000 |
| Kia Sorento V6 | Below 3,500 | 450,000 | 900,000 |
Although this tax will have no direct effect on the price tags, it will raise the entire cost of owning these vehicles. It will also help the government collect more taxes from people belonging to the higher socio-economic class and bring them into the tax net.
The government intends to maintain the auto sector’s existing progress while also urging the industry to completely indigenize car and component production. Get to know Popular driving schools in Islamabad
For more information on taxes in Pakistan, visit our blog.
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