Finance Bill, 2026 proposes revised token tax rates for private vehicles, commercial transport, motor cabs, and public service vehicles in the Islamabad Capital Territory.
ISLAMABAD: The federal government has proposed a revised token tax regime for motor vehicles registered in the Islamabad Capital Territory (ICT) through the Finance Bill, 2026.
According to the proposed amendments to the West Pakistan Motor Vehicles Taxation Act, 1958 (WP Act XXXII of 1958), applicable in the ICT, the existing Tables 2, 3, 4, and 5 of the Schedule will be substituted with new tax rates covering private motor vehicles, motor cabs, public service vehicles, and commercial/loading vehicles.
The revised taxation structure introduces fixed annual token taxes for smaller vehicles and percentage-based taxation linked to invoice values for higher engine capacity vehicles.
Token Tax on Motor Vehicles in ICT
| S.No | Category | Tax Rates for ICT |
| 1 | Engine capacity up to 1000cc | Rs20,000 |
| 2 | Engine capacity from 1001cc to 1300cc | 0.25% of invoice value |
| 3 | Engine capacity from 1301cc to 1500cc | 0.25% of invoice value |
| 4 | Engine capacity from 1501cc to 2000cc | 0.25% of invoice value |
| 5 | Engine capacity from 2001cc to 2500cc | 0.35% of invoice value |
| 6 | Engine capacity from 2501cc and above | 0.35% of invoice value |
The proposed rates indicate a shift towards value-based taxation for mid-sized and luxury vehicles, potentially increasing the annual tax burden on owners of higher-priced automobiles.
Token Tax on Motor Cabs
| S.No | Category | Tax Rates for ICT |
| 1 | Engine capacity up to 1000cc | Rs600 |
| 2 | Exceeding 1000cc but not more than 1300cc | Rs1,000 |
| 3 | Exceeding 1300cc but not more than 1500cc | Rs1,700 |
| 4 | Exceeding 1500cc but not more than 2000cc | Rs2,500 |
| 5 | Exceeding 2000cc but not more than 2500cc | Rs3,400 |
| 6 | Exceeding 2500cc | Rs4,200 |
Public Service Vehicle Tax Rates in ICT
| S.No | Category | Tax Rates in ICT (Per Seat Per Annum) |
| 1 | Vehicle (8-seater) | Rs350 |
| 2 | Vehicle (13-seater) | Rs400 |
| 3 | Vehicle (15-seater) | Rs500 |
| 4 | Vehicle (16-seater) | Rs600 |
| 5 | Vehicle (42-seater) | Rs700 |
| 6 | Vehicle (52-seater) | Rs850 |
Commercial and Loading Vehicles Token Tax
| S.No | Category | Proposed Rates |
| 1 | Vehicles not exceeding 1,250kg in laden weight | Rs500 |
| 2 | Vehicles exceeding 1,250kg but not exceeding 2,030kg | Rs1,000 |
| 3 | Vehicles exceeding 2,030kg but not exceeding 4,060kg | Rs1,000 |
| 4 | Vehicles exceeding 4,060kg but not exceeding 6,090kg | Rs6,600 |
| 5 | Vehicles exceeding 6,090kg but not exceeding 8,120kg | Rs6,600 |
| 6 | Vehicles exceeding 8,120kg | Rs12,000 |
| 7 | Vehicles exceeding 8,120kg but not exceeding 12,000kg | Rs12,000 |
| 8 | Long trailers or other vehicles exceeding 12,000kg but not exceeding 16,000kg | Rs18,000 |
| 9 | Long trailers or other vehicles exceeding 16,000kg | Rs24,000 |
| 10 | Tractor (with trolley) | Rs2,600 |
| 11 | Tractor (without trolley) | Rs2,600 |
The proposed amendments are part of the government’s broader fiscal measures under the Finance Bill, 2026, aimed at enhancing revenue collection and updating taxation mechanisms for different categories of vehicles operating within the Islamabad Capital Territory.
The new token tax rates will come into effect following parliamentary approval of the Finance Bill, 2026 and subsequent enactment through the Finance Act, 2026.
