Motor vehicle tax
While Federal transfers contribute about 91 per cent of the total receipts of the provincial government, of the remaining nine per cent raised provincially, Motor Vehicle Taxes (MVT) contribute only 2.3 per cent in 2019-20. This is a reduction from 4.2 per cent in 2013-14. The decline in MVT is a concern for GoKP as motor vehicle taxes are considered to be buoyant and expected to be registering an organic growth.
Analyzing trends in motor vehicle
SEED has launched a policy note analysing trends in motor vehicle registrations in Khyber-Pakhtunkhwa and Islamabad (the latter is widely perceived as being the out-of-province destination for Khyber Pakhtunkhwa’s residents’ vehicle registrations) to test the hypothesis that Khyber Pakhtunkhwa’s residents prefer to register their vehicles in Islamabad and seeks to understand reasons for this preference.
Of the 1597 randomly selected vehicle owning residents of Khyber Pakhtunkhwa surveyed through PakWheels as part of this study, 27% (424) had Khyber Pakhtunkhwa registrations while the remaining 73% (1173) registered vehicles out-of-province. About 75% (878) of respondents with vehicles registered outside of Khyber Pakhtunkhwa had registered these in Islamabad.
The policy note makes recommendations regarding parametric and structural reforms that the GoKP can adopt to correct for the distortion in motor vehicle registrations.
Motor vehicle tax
