Punjab cabinet raises automobile transfer fees

Slashes registration fees for vehicles of 1501cc to 2000cc from 3% to 2%

LAHORE:

The Caretaker Cabinet in Punjab has authorised a significant increase in the fee for changing ownership of automobiles and motorbikes in the province. However, in a contrasting move, the registration fees for vehicles with engine capacities between 1501cc and 2000cc have been reduced from 3% to 2%.

Additionally, the caretaker government has formed a ministerial committee to consider including 5-marla houses located in posh areas under categories “B” and “C” for property tax purposes. Recommendations from the committee have been sought, while the assessment for property tax on 5-marla houses in normal areas will remain unchanged.

The Excise Department anticipates an additional income of Rs8.5 billion through property tax after the government authorised a survey to adopt a new valuation table for property tax in the province, the first in nine years. The government has also increased the “Vend Fee” and “Still Head Fee” imposed on the production and sale of alcoholic beverages.

Transfer fees have seen an increase after 19 years. The transfer fee for motorcycles and scooters has risen from Rs150 to Rs500. The fee for transferring ownership of cars with engine displacements up to 1000cc has increased from Rs1200 to Rs2500. Similarly, the transfer charges for cars with engine capacities from 1001cc to 1800cc have jumped from Rs2000 to Rs5000. For cars with more than 1800cc engine capacity, the change of ownership fees has increased from Rs3,000 to Rs10,000.

On the other hand, the government has reduced the registration fees for vehicles with engine capacities between 1501 and 2000cc by 1%, resulting in a decrease from 3% to 2% for the registration of these vehicles. The caretaker government has also extended the 95% motor vehicle tax exemption for electric vehicles until June 30, 2025.

Regarding property tax, a committee has been established under the supervision of three provincial ministers to consider collecting property tax from 5-marla houses in posh areas categorised as “B” and “C.” Currently, the Excise Department only collects property tax from “A” category 5-marla houses. It is estimated that over 450,000 5-marla houses in posh areas could be subject to property tax if the ministerial committee approves the proposal, resulting in an additional income of approximately Rs5 billion.

The Caretaker Cabinet has sought feedback from the ministerial committee before making a final decision on a proposal to abolish the 2014 “remission” on property tax and reduce the existing property tax rate for personal use and rental properties from 1/5 to 1/4.

Published in The Express Tribune, July 9^th, 2023.

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