New tax rates effective from July 1 increase annual levies on heavy transport vehicles and raise ad valorem taxes for higher-engine-capacity private vehicles.
LAHORE: The Punjab government has implemented revised motor vehicle tax rates for the fiscal year 2026-27, increasing annual taxes on heavy transport vehicles and raising ad valorem tax rates for larger-engine private vehicles. The revised rates came into effect on July 1, 2026.
The new rates have been notified under the Punjab Motor Vehicles Taxation Act, 1958 as part of the provincial government’s revenue measures for FY2026-27.
Higher annual tax on goods transport vehicles
The Punjab government has substantially increased annual taxes on vehicles used for the transport and haulage of goods and materials, including trucks, trailers, delivery vans and tricycles, based on their maximum laden capacity.
Under the revised schedule:
• Vehicles exceeding 4,060 kilograms but not exceeding 8,120 kilograms will now pay an annual tax of Rs6,600, up from Rs2,200.
• Vehicles exceeding 8,120 kilograms but not exceeding 12,000 kilograms will be taxed at Rs12,000, compared with the previous Rs4,000.
• Vehicles exceeding 12,000 kilograms but not exceeding 16,000 kilograms will pay Rs18,000, an increase from Rs6,000.
• Vehicles with a maximum laden capacity exceeding 16,000 kilograms will now be subject to an annual tax of Rs24,000, up from Rs8,000.
Higher tax for larger engine vehicles
The provincial government has also revised the ad valorem tax structure for private vehicles based on engine capacity.
Under the amended schedule:
• Vehicles with an engine capacity exceeding 1,000cc but not exceeding 2,000cc will now be taxed at 0.3 per cent of the invoice value, compared with the previous rate of 0.2 per cent.
• Vehicles with an engine capacity exceeding 2,000cc will be taxed at 0.4 per cent of the invoice value, up from 0.3 per cent.
Effective from July 1
The revised motor vehicle tax rates became effective on July 1, 2026, and apply throughout Punjab under the provisions of the Punjab Motor Vehicles Taxation Act, 1958.
Officials said the revised tax structure forms part of the province’s fiscal strategy for FY2026-27 and is intended to enhance revenue collection while modernising the motor vehicle taxation framework.
Tax experts noted that the increase will have a greater financial impact on commercial transport operators and owners of higher-engine-capacity vehicles. They added that the revised rates are expected to contribute to provincial revenues while aligning vehicle taxation with the government’s broader fiscal objectives for the new financial year.