Debunking Menace Luxury Tax on Hybrid Cars in Punjab

The government of the Punjab levied the one-time tax on the registration of imported cars in the annual financial bill of 2016-17. The decision is made as the basic cause of the revenue shortfall of the registration of the imported vehicles. The one-time tax was catalogued by the government as the luxury tax. They also scrutinize the results of levying of tax on the imported vehicles. The Punjab government has already shown its willingness to promote the hybrid vehicles to control the shortfall of the fuel and favor the import and use of hybrid vehicles. The import duties on hybrid cars were reduced to 50% back in 2013 and the current imposition of luxury tax on the imported cars are the subsidy for hybrid cars has been retracted.
People should note that point that the hybrid cars are getting subsidies all over the world and the Punjab government is demanding with the imposition of unnecessary taxes. The local manufacturers are capable of producing the affordable hybrid cars and government does not take the initiative to promote the fuel efficient car. The fragmented luxury tax structure is really the moot point. The luxury tax structure on registration of the imported cars in Punjab
Category of Importer motor car Rate of Tax
Motor car engine capacity exceeding 1300cc but not exceeding 1500cc PKR 70,000
Motor car engine capacity exceeding 1500cc but not exceeding 2000cc PKR 150,000
Motor car engine capacity exceeding 2000cc but not exceeding 2500cc PKR 200,000
Motor car engine capacity exceeding 2500cc PKR 300,000
The Punjab government levied the tax on the imported car registration but it is not levied in Islamabad. If you want to get register the vehicle, Toyota Prius in Lahore, then you will have to pay the luxury tax of Rs.150,000 and the total registration cost reaches to Rs.310,000. The same Toyota Prius gets registered in Islamabad for only Rs.75,000. The website of excise and taxation department of Sindh, the luxury tax on the imported 1800cc car sits at the meager Rs.5000.
Luxury Tax
S.No Category of Motor Vehicles Rate of Fee
1. Imported motor car with engine capacity from 3000cc and above Rs.100,000
2. Imported motor car with engine capacity from 2000cc to 2999cc Rs.50,000
3. Imported motor car with engine capacity from 1500cc to 1999cc Rs.5,000
4. Imported motor car with engine capacity from 1500cc and above Rs.5,000