LAHORE – The government of Punjab has jacked up yearly token tax on vehicles across the region, effective from July 1.

In Budget 2024-25 budget, the government of country's most populated region amended the token tax based on the vehicle's value rather than its engine capacity. This change responds to significant surge in vehicle prices over recent years, which will result in higher token tax rates based on the invoice value of the vehicle.

The changes in token tax rates were approved as part of the Finance Bill 2024. Under the revised structure, 1000cc-2000cc cars will be 2 percent annual token tax based on their invoice value.

Earlier, token taxes were calculated according to engine power, with vehicles above 2000cc facing a three percent annual token tax based on the invoice price.

Meanwhile, lifetime token tax for vehicles up to 1000cc has been raised from Rs15,000 to Rs20,000. When ownership of a vehicle up to 1000cc is transferred, the token tax must be paid again.

The lifetime token tax requirement does not apply if ownership is transferred after 10 years.