Business Desk 
Aug 25, 2025
In order to increase revenue, the federal government has chosen to raise the token tax rates for commercial, public, and private vehicles in Islamabad.
Token taxes and fees can now be revised by the Ministry of Interior thanks to cabinet approval of amendments to the West Pakistan Motor Vehicles Taxation Act, 1958.
By bringing Islamabad's tax rates into line with those of the provinces, this action seeks to maintain equity and uniformity.
Since 2019, the token tax rates have stayed the same, which has limited the Excise department's ability to raise money.
Despite collecting Rs4.29 billion in fiscal year 2024–2025, the department has set a goal of Rs4.5 billion for the 2025 Finance Bill.
The tax system is now inconsistent with its provincial counterparts due to outdated rates that have hindered revenue collection.
The goal of the proposed increase is to increase tax administration efficiency and promote parity.
In the "West Pakistan Motor Vehicles Taxation (Amendment) Act, 2025", a draft law submitted by the ICT Administration, updated token tax rates for all vehicle types are suggested.
Additionally, the bill asks for permission for ICTA to keep any money collected above the Rs4.5 billion goal for its own development projects.
Vehicle registration, transfers, and tax collection are handled by the Excise and Taxation Department, ICT, on behalf of the federal government.
The department hopes to increase operational effectiveness and revenue collection with this change.
