Punjab increases vehicle token tax after 20 years

Lahore – The Punjab government has significantly increased the vehicle token tax rates after 20 years. According to the provincial finance bill, the token tax for commercial and large vehicles above 1000cc has been raised. Car dealers have also been made responsible to act as withholding agents for the government.

It has been made mandatory for showroom owners to pay heavy fines if they deliver vehicles to customers without registration. The finance bill also states that an 8% sales tax will be applied on payments made via credit or debit cards at hotels while sales tax on various services has been increased from 5% to 8%.

Penalties for companies violating tax laws have been set between 500,000 and 1,000,000 rupees. Traders who fail to file returns for two consecutive months will be removed from the Active Taxpayer List.

Additionally, a 3% tax will be imposed on the services of foreign exchange companies and money changers. The Punjab government has abolished the “cotton fee” on raw cotton while newly established businesses will be exempt from tax laws for the first six months.

Late payment penalties for property tax have been abolished on a monthly basis. Unregistered traders will not be issued government contracts, licenses or NOCs. Penalties have also been significantly increased for violations of PRA (Punjab Revenue Authority) laws and failure to issue invoices.