Have a look at the annual token tax in Punjab vs. Federal for FY 2019-20!

The sky-rocketing taxes and duties on the automobiles in Pakistan has been the most discussed topic in the past few days. Apart from the 5% advanced customs duty (ACD) on the import of raw material and 2.5-7.5% Federal Excise Duty (FED) on all categories of cars, there are several other taxes on automobiles. The government, in its first budget of 2019-20, announced several high amounts of taxes and duties, some of which were withdrawn in the name of typography error. The government has so far been on the receiving end of criticism from the general public as well as the market insiders in terms of the inconsistent policies for the automobile industry. The annual token tax for the year 2019-20 was also announced in the finance bill. In the previous blog, we compared the current annual token tax of Punjab with the last year and found out that a substantial relief was provided to the non-filers for all categories of cars except those falling in the lifetime slab of 1000cc and below. It’s quite a surprising step from the government because it should have been the other way around.

In the annual token tax, 2019-20 announced for the Federal, lifetime token has been imposed on cars up to 1000cc as in Punjab. However, it’s highly criticized by the taxi drivers’ community in the federal capital who own either a Suzuki FX or Mehran as the only source of their bread and butter. It’s somehow a valid criticism because the lifetime annual token tax is the same for all cars up to 1000cc engine capacity regardless of their total worth. It means that a 90’s car worth 1-1.5 lacs and the latest model worth nearly 15 lacs carry the same amount of tax to be paid by the owner. Anyhow the token tax for Islamabad registered cars up to 1000cc is Rs.21,000 for filers and Rs.31,000 for non-filers. It applies to all locally assembled vehicles including Suzuki Alto, Wagon R, Cultus, Bolan, Ravi and United Bravo. Note here that the total annual token tax is comprised of three parts, including token tax, income tax, and professional tax. The professional tax for all categories is the same, i.e. Rs.100 except the lifetime category for which it’s Rs.1000 in the federal capital.

All the variants of Toyota Corolla XLi and GLi are placed in the 1200 cc to 1299 cc category alongside FAW V2. The token tax for these cars in the federal is Rs.3350 and Rs.5100 for filers and non-filers respectively. The next most selling category of cars in Pakistan is from 1301 cc to 1499 cc in which all variants of Honda City, Civic RS Turbo and Suzuki Swift exist. The annual token tax for this category is Rs.6600 for filers and Rs.9100 for non-filers. It is worthy to mention here that the 1.3L and 1.5L variants of City are equivalent to 1339 cc and 1497 cc respectively. There is a misconception of considering 1.3L variant as 1300cc for which the annual token tax is different. Even Suzuki Swift has the engine capacity of 1328 cc, and Honda Civic 1.5L RS Turbo is powered by a 1498 cc engine. Moving on, all other variants of the Toyota Corolla and Honda Civic fall in the 1600 cc to 1999 cc engine displacement category. It has a token tax of Rs.9600 and Rs.14,100 for filers and non-filers respectively. For all the vehicles exceeding 2500 cc, the total annual token tax is Rs.22,100 for filers and Rs.32,100 for non-filers.

As a matter of fact, the total amount of annual token taxes for federally registered cars is still less than that imposed on Punjab registered vehicles. To have a clear idea of this, a token tax breakdown comparison chart between Punjab and Federal is attached below.

With the help of the above chart, one can easily calculate the token tax for their vehicle either registered in Punjab or Federal. What are your thoughts on the rates of annual token tax for the year 2019-20? Let us know in the comments section below. Stay with PakWheels for more statistical updates on the automobile industry.