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Carbon tax imposed on vehicles


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  • Electric vehicles exempted, charges to be collected when issuing revenue license 

A carbon tax has been imposed on motor vehicles with effect from 1 January and will be charged from all except electric vehicles, according to the Commissioner General of Motor Traffic. 

A carbon tax is a tax levied on the carbon content of fuels. It is a form of carbon pricing. Carbon is present in every hydrocarbon fuel (coal, petroleum, and natural gas) and converted to carbon dioxide. The carbon tax will not be mandatory this year but will be from 2020. When the revenue license is given in 2020 the charges for both years will need to be paid.  

“The tax will be charged under the 2018 Financial Act and under three categories -- the manufacturing year of the vehicles of less than five years, between five and ten years and more than ten years,” the Commissioner said. 

“Hybrid vehicles using petrol or diesel and based on their engine capacity with a manufacture date of less than five years would be charged 25 cents for one cubic centimetre, between five and ten years 50 cents and more than ten years Rs. 1.00.”

Diesel or petrol vehicles with a manufacture year of less than five years would be charged 50 cents and between five and ten years Rs. 1.00 and more than ten years Rs. 1.50 or one cubic centimetre according to the engine capacity.

Passenger transport buses with a manufacture year of less than five years will be charged Rs. 1,000, between five and ten years, charged Rs. 2,000 and more than ten years Rs. 3,000.

Charges would be made through the provincial DMT commissioners when obtaining the revenue license.


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