PESHAWAR: The Khyber Pakhtunkhwa (KP) government has introduced new taxes on leased auqaf (endowment) properties, small residential units, and commercial transport vehicles as part of the upcoming fiscal year’s Finance Bill.
According to the bill, amendments have been made to the Motor Vehicle Act 1958, introducing revised tax rates for commercially operated vehicles across the province.
Under the new structure, rickshaws will be taxed at Rs 1,000 annually, while four-seater vehicles will carry a Rs 1,500 yearly levy. Six-seater vehicles will be charged Rs 2,000 per year. For larger passenger transport, vehicles with 15 seats will be taxed at Rs 400 per seat annually, while those exceeding 15 seats will be charged Rs 500 per seat.
The Finance Bill also proposes taxation on hotels based on the number of rooms and actual occupancy. A 5 percent tax will be applied on hotel operations, while establishments without a Point of Sale (POS) system will be assessed based on 50 percent of total room units and 10 percent of actual room rental value.
In addition, the government has imposed new regulatory penalties for tax compliance violations. Individuals failing to submit tax returns by the deadline will face fines and additional surcharges. Those who do not register before providing taxable services may be penalized at least Rs 400,000.
The bill further states that failure to register within 90 days of providing taxable services may result in imprisonment of up to one year, a fine equivalent to the tax amount, or both. Any changes in registration details without proper disclosure will carry a penalty of Rs 25,000.
Moreover, a daily fine of Rs 300 will be imposed for late filing of tax returns. Failure to install a restaurant invoice management system will result in a penalty of Rs 500,000, according to the proposed legislation.
The provincial government said the measures aim to broaden the tax base and improve revenue collection as part of its broader fiscal reforms.
