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KP to impose tax on vehicles registered in other provinces

In a recent move aimed at enhancing revenue generation, the Khyber Pakhtunkhwa (K-P) government has unveiled plans to introduce a “Road User Tax” on all new vehicles with registration numbers from Punjab, Sindh, Islamabad Capital Territory (ICT), and Balochistan that operate on K-P roads.

According to a report, this decision was taken due to the fact that a minimal number of vehicles in the province are registered in K-P, resulting in a significant portion of annual token tax revenue being directed to other provinces. 

Currently, the K-P Excise Department has registered only 123,420 private and government vehicles, 41,197 commercial passenger vehicles, 48,691 commercial loading vehicles, and approximately 1,000,000 motorcycles. 

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These figures account for just 25 to 30 percent of the total vehicles operating in the province.

To address this issue, the Excise Department has proposed two options for amending the Road Tax Act to the provincial government. 

The first option involves collecting a lump sum road tax, while the second suggests the re-registration of vehicles with out-of-province number plates. 

Given the logistical challenges associated with re-registration—such as the need for check posts, vehicle impoundment, and parking spaces—the Road User Tax is expecyed to be the more feasible solution and is likely to be approved by the Cabinet.

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