The federal government has approved a revised vehicle token tax structure for the 2026 to 2027 fiscal year, introducing a major change for vehicle owners in Islamabad.
Instead of relying solely on engine capacity, the Excise and Taxation Department will now calculate annual token tax for most vehicles using a percentage of the vehicle’s original invoice value. The new system is designed to make taxation more balanced by considering the actual value of each vehicle.
If your vehicle is registered in Islamabad, here’s everything you need to know about the updated token tax rates, calculation method, and online payment process.
Islamabad Vehicle Token Tax Rates 2026 to 2027
The following are the officially announced token tax rates for Islamabad registered vehicles.
| Engine Capacity | Token Tax |
|---|---|
| Up to 1000cc | Rs. 20,000 |
| 1001cc to 1300cc | 0.25% of Invoice Value |
| 1301cc to 1500cc | 0.25% of Invoice Value |
| 1501cc to 2000cc | 0.25% of Invoice Value |
| 2001cc to 2500cc | 0.35% of Invoice Value |
| Above 2500cc | 0.35% of Invoice Value |
What Is the New Invoice Value System?
The biggest change in the new budget is the introduction of invoice value based taxation.
Previously, vehicles with the same engine size paid identical token tax regardless of their market value or purchase price.
Under the revised system, vehicles above 1000cc will be taxed according to a percentage of their original invoice value.
What Does Invoice Value Mean?
Invoice value refers to the original purchase price of the vehicle when it was first sold by the manufacturer or dealership.
This value is already available in the Excise and Taxation Department’s records and is used to calculate the annual token tax.
Why Has the Government Changed the Tax Formula?
The new system aims to create a fairer taxation policy.
Under the previous structure, both an older sedan and a newly purchased luxury SUV with similar engine sizes could end up paying the same annual token tax.
Now, vehicles with higher original values will pay higher taxes, while many older vehicles may pay comparatively less.
How to Calculate Your Islamabad Token Tax
If your vehicle falls above the 1000cc category, you can estimate your token tax using a simple formula.
Formula
Invoice Value × Applicable Percentage = Annual Token Tax
Example 1
Vehicle Engine: 1300cc
Invoice Value: Rs. 4,000,000
Tax Rate: 0.25%
Calculation:
Rs. 4,000,000 × 0.25%
Annual Token Tax = Rs. 10,000
Example 2
Vehicle Engine: 2700cc
Invoice Value: Rs. 20,000,000
Tax Rate: 0.35%
Calculation:
Rs. 20,000,000 × 0.35%
Annual Token Tax = Rs. 70,000
How to Pay Islamabad Vehicle Token Tax Online
The Islamabad Excise Department now allows vehicle owners to pay token tax online without visiting government offices.
Follow these steps to complete your payment.
Step 1: Install the City Islamabad App
Download the official City Islamabad App from the Google Play Store or Apple App Store.
Make sure you install the official application developed for Islamabad Capital Territory services.
Step 2: Create Your Account
Register using:
- CNIC
- Mobile Number
- Email Address
Verify your account through the OTP sent to your mobile phone.
Step 3: Open Token Tax Services
After logging in, go to the Excise and Taxation section.
Select the Vehicle Token Tax option.
Step 4: Enter Vehicle Registration Number
Input your vehicle registration number.
The application will automatically retrieve:
- Vehicle owner details
- Vehicle model
- Engine capacity
- Outstanding token tax
Step 5: Generate PSID
Confirm the displayed information.
Generate your unique Payment System Identifier (PSID), which will be required for payment.
Step 6: Pay Through 1Bill
You can complete payment using:
- Mobile Banking Apps
- Debit Cards
- Credit Cards
- Easypaisa
- JazzCash
- 1Link ATMs
Once payment is successful, your tax record will be updated automatically.
Important Tips Before Paying Token Tax
Clear Outstanding Traffic Fines
If your vehicle has unpaid e challans, you may need to clear them before completing the token tax process.
Keep Your Payment Receipt
Although digital verification is available, keeping a printed copy of the payment receipt is recommended.
Avoid Last Minute Payments
Government servers often experience heavy traffic near the deadline.
Paying early can help you avoid delays or late payment penalties.
Benefits of the New Token Tax System
The revised taxation model offers several advantages.
- Fair taxation based on vehicle value
- Convenient online payment
- Digital tax records
- Faster verification
- Reduced visits to Excise offices
- Improved transparency
Frequently Asked Questions
What is the token tax for a 1000cc vehicle in Islamabad?
Vehicles up to 1000cc are charged a fixed annual token tax of Rs. 20,000.
How can I find my vehicle’s invoice value?
The invoice value is available in the vehicle’s original purchase documents and Excise Department records.
Can I still pay token tax at the Excise Office?
Yes. Physical payment facilities are still available, although online payment is encouraged.
What happens if I miss the payment deadline?
Late payments may result in penalty charges. Unpaid taxes can also create issues during vehicle transfer or road inspections.
Does the new invoice value system apply to imported vehicles?
Yes. Imported vehicles are taxed using the value assessed by Pakistan Customs during import.
