Islamabad Token Tax 2026: How Much More Will Car Owners Pay Now?

Car owners in Islamabad will now have to pay higher annual token tax under the revised structure effective from July 1, 2026.

The updated rates change how many ICT-registered vehicles are taxed. Instead of relying only on engine capacity, the new system links token tax for most cars above 1000cc to the vehicle’s invoice value. This means owners of newer, higher-value sedans, crossovers and SUVs could face a noticeably higher yearly ownership cost.

Under the revised Islamabad token tax structure, vehicles up to 1000cc will be charged a fixed annual token tax of Rs20,000. Cars from 1001cc to 2000cc will be charged 0.25% of the invoice value, while vehicles above 2000cc will be charged 0.35% of the invoice value.

For example, a car with an invoice value of Rs6 million in the 1001cc to 2000cc category could face annual token tax of around Rs15,000 under the 0.25% formula. A larger SUV valued at Rs15 million in the above-2000cc category could face around Rs52,500 under the 0.35% formula.

The biggest change is for owners of expensive vehicles. Two cars with similar engine capacity may now have different tax bills if their invoice values are different. This makes the vehicle’s purchase price more important when calculating annual token tax.

Islamabad Token Tax 2026 Rates

Vehicle Category	New Annual Token Tax
Up to 1000cc	Rs20,000
1001cc to 2000cc	0.25% of invoice value
2001cc and above	0.35% of invoice value

 

The revised rates apply to Islamabad-registered vehicles for the new fiscal year. Token tax is generally charged for the fiscal period from July 1 to June 30, while newly registered vehicles are charged according to the applicable period from the date of registration.

For buyers, the new formula adds another cost to consider before purchasing a car in Islamabad. A higher invoice value may not only increase upfront taxes and registration cost but also affect the yearly token tax bill.

Used-car buyers should also check the vehicle’s registration city, engine capacity and original invoice value before finalizing a deal. Islamabad-registered cars in higher-value categories may now carry a higher annual tax burden than some buyers expect.

The move is likely to impact owners of mid-size sedans, new crossovers, imported SUVs and luxury vehicles the most. Small-car owners up to 1000cc will face a fixed Rs20,000 annual charge under the revised structure.

 

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