Losing revenue: Late car registration penalty to be slashed

In Islamabad, penalty ranges from Rs2,000 (60 days) to Rs5,000 (180 days). Punjab residents prefer registration there.

LAHORE:

The Excise and Taxation Department has proposed a reduction in fines for the late registration of new vehicles as the province is losing revenue to the Islamabad Capital Territory, where the penalties for late registration are far less stringent.

An official of the department told The Express Tribune that the high rates had resulted in a loss of tax revenue in the Punjab. He said that the department had submitted a summary to the chief minister seeking to amend Rule 42 of the Motor Vehicle Rules of 1969.

Currently, residents of Punjab must register new vehicles within 60 days of purchase with the registration branch of the Excise and Taxation Department. Registration after more than 60 days carries a fine of 25 per cent of the total purchase cost of the vehicle. After 120 days, the penalty rises to 50 per cent of the purchase cost, and after 240 days, it rises to 100 per cent of the cost. In Islamabad, the penalty ranges from Rs2,000 (after 60 days) to Rs5,000 (after 180 days). As a result, Punjab residents tend to go for late registration to Islamabad.

The official said that many motorbikes owned by Rawalpindi residents were registered in Islamabad. He said the heavy fines meant the Punjab was losing revenue to the federal capital.

Under the new Excise and Taxation Department proposal, owners of new motorcycles, scooters and rickshaws would have to pay a fine of Rs500 should they fail to register the vehicle within 30 days of purchase. For car owners, the fine would be Rs2,000 for registration after 60 days, rising to Rs5,000 for registration after 180 days.

The official said that the initial “grace period” of two months after purchase had been reduced to one month for motorcycles to compel people to register their vehicles immediately.

The department had earlier introduced a lifetime token tax payment of Rs10,000 for motor vehicles of less than 1,000cc capacity.

According to the department, about 80,000 vehicles are registered in the province each month. Out of these, 45,000 are registered in Lahore.

Published in The Express Tribune, July 29^th, 2012.