Punjab Govt Reimposes Token Tax on Decade Old Cars

The Government of Punjab has decided to reimpose the token tax on 10-year-old vehicles.

Two months ago, it had provided a concession of 25 to 30 percent on the token tax, which has now been reimposed.

The provincial Assembly has passed a proposal that posits that older cars produce more pollution, hence the relaxation on payment of their token take must end. It also stated that the provincial government will collect both the current tax and the previously exempted tax on them.


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The provincial government’s tax rates are:

It had announced in June 2021 that failure to pay the token tax may lead to the seizure of the vehicle, arrest, imposition of a fine, or the cancellation of registration.


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The federal government recently announced the new Auto Policy 2021-2026 that is aimed at steering the automotive sector towards the adoption of Electronic Vehicles (EV) through tax reliefs (specifically for EVs), and the reimposition of the token tax may be an indirect measure to add momentum to the adoption of EVs.

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