Motorists in Islamabad could face higher expenses under the proposed Budget 2026–27, as the government is considering significant revisions to the vehicle token tax structure.
According to reports, the proposed changes would increase annual token taxes for several categories of vehicles.
Owners of cars with engine capacities up to 1000cc may be required to pay a fixed token tax of Rs. 20,000, representing a substantial increase compared to previous rates.
The revised structure also targets mid-range and high-end vehicles. Cars falling into the mid-sized category could be taxed at 0.25% of their invoice value, while luxury vehicles with engine capacities above 2000cc may face a higher rate of up to 0.35%.
Officials believe the new framework will help improve revenue collection and create a more structured taxation system for vehicle owners.
However, the proposal is expected to increase the financial burden on many motorists, especially those already facing rising fuel, maintenance, and insurance costs.
Commercial transport operators may also be affected by the revised tax policy. Motor cabs and other commercial vehicles are included in the proposed changes, with tax rates varying according to engine size and vehicle category.
Industry observers say the increase could raise the overall cost of vehicle ownership and transportation. Some experts believe higher taxes may influence purchasing decisions, particularly for buyers considering larger or luxury vehicles.
The proposal has already sparked discussion among motorists and transport sector stakeholders, who are closely monitoring the budget process. Many are concerned about the potential impact on household expenses and business operating costs.
The revised token tax structure remains subject to approval and may be adjusted before final implementation as part of the federal budget process.