LAHORE (Kashmir English): The Punjab government has proposed an increase in vehicle token taxes under the Finance Bill 2026-27, marking a major hike in token tax rates in nearly two decades.
Punjab Finance Minister Mian Mujtabaur Rehman on Tuesday presented the Rs5.9 trillion provincial budget for fiscal year 2026-27 after the cabinet’s approval.
According to the proposed legislation, token taxes for commercial and heavy vehicles above 1,000 cc will be increased. At the same time, car dealers and showroom owners will face heavy fines for failure to ensure vehicle registration.
Under the proposal, the token tax on commercial loader vehicles will increase by up to three times.
Vehicles carrying loads between 4,060 kg and 8,110 kg will see their annual tax rise from Rs2,200 to Rs6,600. For vehicles with loads between 8,120 kg and 12,000 kg, the tax is proposed to increase from Rs4,000 to Rs12,000.
Similarly, the tax on a vehicle with a load of 12000 to 16000 kg is proposed to be increased from Rs 6000 to Rs 18000, and on a vehicle with a load of more than 16000 kg, the tax is proposed to be increased from Rs 8000 to Rs 24000.
The document further stated that the token tax on vehicles between 1,000 and 2,000 cc will be increased by 0.1 percent on the invoice, while a proposal to increase the tax on vehicles above 2,000 cc from 0.3 percent to 0.4 percent on the invoice is under consideration.
Punjab budget
According to the finance bill, sales tax of 8 percent will be applicable on payment by credit or debit card at a hotel, and the sales tax rate on various general services has been increased from 5 to 8 percent.
The fine for companies for violating tax laws has been fixed from Rs 5 million to Rs 1 million. Traders who do not submit returns for two consecutive months will be removed from the active taxpayer list, the budget speech stated.
In addition, a three percent tax has been proposed on the services of foreign exchange companies and money changers.
The Punjab government has also decided to abolish the ‘cotton fee’ imposed on raw cotton, while newly started businesses will be exempted from tax laws for the first six months.
The monthly penalty for late payment of property tax has been abolished, and government contracts, licenses, or NOCs will not be issued to unregistered traders.
The government also proposed an increase in fines for violating Punjab Revenue Authority (PRA) rules and not issuing invoices.
