Carbon emission tax being considered by Punjab Government


Developed countries across the globe are working hard to cut carbon emissions by making automakers conform to certain emission standards. Certain automakers like Volkswagen have gotten in trouble for misleading the public with carbon emission rating especially on their diesel variants. Here in Pakistan, after getting Prime Minister’s blessings, the Punjab government has been thinking to levy an emission tax of one rupee per litre on both petrol and diesel vehicles. 

Pros & Cons

Looking at the positive aspect, the emission tax would deter the public from using private vehicles in favour of public transportation. Although one rupee per litre will not make a huge impact on the consumption side, it will generate high revenue for funding green projects like solar farms. The projected revenue generated from such a tax will amount to PKR 8 billion to 10 billion per year.

However, on the other hand, this is likely to increase the price of fuel which has already been very high and causing a commotion among the public.

Currently, the Excise department is facing challenges in collecting token tax as it requires a large workforce. According to the latest statistics, the department is collecting around PKR 7 billion in token tax and PKR 500 million in transfer fees. The general public is also not willing to pay token tax, which adds to the overall challenges in token tax collection.

Prime Minister Imran Khan was forwarded this proposal by Punjab Chief Minister Usman Buzdar. While the PM approved the proposal, it remains the prerogative of the provincial government whether to go ahead with this tax. The final decision will be made in such a way to give relief to the public in other aspects. For example, relief can be provided by reducing token tax or transfer fee amount.

Excise department is also working on a new initiative which includes an express service to facilitate the transfer and registration of automobiles. This will improve the efficiency of both of these services by ensuring all applications get processed under 48 hours. Motorbike owners will have to pay PKR 300 and car owners will have to pay PKR 1000 to use this service.

Let us know your opinion in the comments section below and whether or not Pakistan needs to embark upon green initiatives.


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  • TiredOfThisShit

    It would be better to rate efficiency of engines in use in various vehicles in Pakistan and tax lower efficiency engine cars at the time of registration. Further, tax be levied on the company using that engine to discourage it from using lower efficiency engines.

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