Punjab: Increase in vehicle token tax rate

LAHORE:  The Punjab government has increased the token tax rate on vehicles after 20 years. The Punjab government has issued the finance bill for the new fiscal year.

According to the finance bill, the token tax on commercial and large vehicles above 1,000 cc has been increased, while car dealers have been made obliged to work as the government’s withholding agents.

Showroom owners will have to face heavy fines for delivering vehicles to customers without registration.

In the new finance bill, the fine for companies for violating tax laws has been fixed at Rs 5 to 1 million. Traders who do not submit returns for two consecutive months will be removed from the active tax payer list.

In addition, it is proposed to impose a three percent tax on the services of foreign exchange companies and money changers. The Punjab government has abolished the ‘cotton fee’ imposed on raw cotton, while newly started businesses will be exempted from tax laws for the first six months.

The monthly penalty imposed for late submission of property tax has been abolished, while non-registered traders will not be issued government contracts, licenses or NOCs.

Fines for violation of PRA rules and failure to issue invoices have been increased significantly.

According to the Finance Bill, 8% sales tax will be applicable on payments made by credit or debit cards at hotels, while the sales tax rate on various general services has also been increased from 5% to 8%.