ISLAMABAD – The federal government has decided to implement revised token tax rates for vehicles in Islamabad from July 1 under the Finance Bill 2026-27, according to official sources.
The excise and taxation department in the capital collects token tax from vehicle owners as part of the annual registration and taxation system, which helps maintain vehicle records and generate government revenue.
Token tax is an annual levy payable by vehicle owners within a stipulated period, with failure to comply resulting in penalties and legal complications.
Under the revised structure, a fixed one-time token tax of Rs10,000 will be imposed on vehicles with engine capacities of up to 1,000cc. This category includes models such as Suzuki Alto, Cultus and Kia Picanto.
For vehicles in the same category manufactured before 2010, the token tax will be set at Rs20,000.
Vehicles with engine capacities between 1,001cc and 1,300cc will be subject to tax calculated at 0.3 per cent of their invoice value. In addition, a federal token tax rate of 0.25pc of the invoice value will also apply from July 1.
According to the Finance Bill, vehicles manufactured before 2010 will be charged a fixed token tax of Rs2,500, while those manufactured in or after 2010 will be taxed at Rs6,200.
The revised rates will come into effect from the start of the new fiscal year as part of broader taxation measures outlined in the federal budget framework.
