Taxing times: Lifetime car token fee raised to Rs17,700

Excise and Tax Dept van to allow car owners to pay token tax at pickets.

LAHORE: Owners of vehicles of up to 1,000cc will be required to pay Rs17,700 to obtain a lifetime token for their cars rather than the Rs10,950 it cost previously, Excise and Taxation Director General Humayun Mazhar Sheikh told The Express Tribune on Monday.

The increase, he said, was due to an alteration in how the token tax was calculated. Earlier, car users were required to pay an annual token fee, which consisted of a token tax element, an income tax element and a professional tax element. Then the government introduced a lifetime token for cars of up to 1,000cc, calculated at 10 times the cost of the annual token fee (Rs10,000), plus the annual income tax element of Rs750 and the annual professional tax element of Rs200, to reach Rs10,950 in total.



Now, the lifetime token includes a lifetime income tax element of Rs7,500, so the new token fee is Rs17,700. Token fee payments made in previous years are deductible from the lifetime token fee. So, if a car owner has paid the annual token fee for three years (say Rs1,000 a year), she will have to pay Rs14,700 for the lifetime token fee.

Sheikh said that the added income tax in the fee would go to the Income Tax Department of the Federal Board of Revenue. The Excise and Taxation Department would receive the same amount it had been getting before, he added.



Mobile van

The E&T Department has decided to launch a ‘token tax van’ which will allow vehicle owners stopped at pickets to pay their dues on the spot.

“Many people caught at E&T pickets say, ‘Please don’t fine us, we are ready to pay right now,’” said Motor Registration Authority Aziz Tariq. “This van will allow them to do that.”

The department has prepared one van and already done a few test runs. It will only be for vehicles of up to 1,000cc which need to pay lifetime token fees. The van is equipped with a computer, an internet connection and a printer. A car owner stopped at a picket will be able to pay the lifetime token fee at the van and get a receipt. If unable to pay, the vehicle owner will be fined and their documents will be seized.

Tariq said that the van would be a great convenience to tax payers and would help the department generate more revenue.

Published in The Express Tribune, July 2^nd, 2013.