Islamabad, May 11, 2025 – Pakistan has witnessed a significant surge in motor vehicle tax collection, which soared by 58% during the first nine months (July–March) of the ongoing fiscal year 2024-25, according to official data released by the Ministry of Finance.
The report indicates that total revenue from motor vehicle tax reached Rs39.55 billion in the July–March period, up from Rs24.98 billion collected during the same period in the previous fiscal year. The increase highlights both improved compliance and a pickup in motor vehicle activity across the country.
Although the collection of motor vehicle tax is constitutionally under the domain of provincial governments, it is still included in the federal fiscal performance reports. The data revealed that Punjab led the provinces in terms of total collection, contributing Rs22.82 billion, compared to Rs14.89 billion in the corresponding months of FY2023-24. This marked a robust growth of 53.26% for the province.
In contrast, Sindh posted the highest growth rate in tax receipts. The province registered a 75% jump in motor vehicle tax revenue, collecting Rs13.73 billion during the nine-month period, up from Rs7.86 billion in the previous year.
Khyber Pakhtunkhwa and Balochistan also showed notable performance, albeit on a smaller scale. Khyber Pakhtunkhwa collected Rs2.06 billion, while Balochistan contributed Rs0.93 billion in motor vehicle tax during the review period.
Analysts in the automotive sector link the substantial increase in tax revenue to improved motor vehicle sales, spurred by favorable economic factors such as lower interest rates and increased consumer financing. The availability of financing options and economic recovery has reportedly boosted the demand for motor vehicles, particularly in urban centers.
Moreover, enhanced enforcement measures and digitization of the tax payment system in provinces like Punjab have made it easier for citizens to comply, thereby improving revenue outcomes.
As the fiscal year progresses, provincial governments are expected to further streamline motor vehicle tax collection mechanisms to support long-term revenue generation, infrastructure development, and road maintenance initiatives.