Govt to cancel registration of tax-defaulting vehicles
- By Sanjay Sadhwani -
- Aug 05, 2026
KARACHI: The Sindh Cabinet on Wednesday approved major reforms in the Excise Department’s vehicle registration, taxation and insurance system, including strict action against vehicles whose owners fail to pay taxes.
The meeting, chaired by Chief Minister Sindh Murad Ali Shah, approved a policy for the deregistration of off-road and unserviceable vehicles.
Under the new policy, owners of damaged or scrap vehicles will be required to submit applications for deregistration by September 30, 2026.
Vehicles that have not paid taxes or submitted any declaration since July 2010 will be considered off-road, according to the approved policy.
The registration of off-road vehicles with outstanding dues will be suspended after 30 days, while continued non-payment will result in complete cancellation of registration after 60 days.
Motor Dealers
The cabinet also approved relief measures for licensed motor dealers by introducing a holding period facility for vehicles purchased for resale.
Under the policy, motor dealers will be allowed to keep vehicles acquired for resale without registration for an initial period of six months, with two possible extensions of three months each. However, the total holding period will not exceed 12 months.
Read more: Balochistan Police helps in recovery of 24 cars stolen from Karachi
During the holding period, dealers will be required to pay a reporting fee of Rs100 per vehicle, while their dealership licence must remain valid.
Vehicles Insurance
The Sindh Cabinet also approved reforms related to motor third-party insurance.
Under the revised policy, third-party insurance coverage will remain valid until its expiry date even after the ownership of a vehicle is transferred.
Officials said the move would eliminate the need for buyers to purchase duplicate insurance for the same vehicle and help reduce costs for vehicle owners.
The reforms were supported by the Securities and Exchange Commission of Pakistan (SECP), Central Depository Company (CDC) and the insurance industry, while the chief minister said the measures were aimed at improving public convenience, transparency and administrative efficiency.