LAHORE: The Punjab Excise and Taxation Department has issued a letter to the presidents of 26 banks to show displeasure for not paying token taxes of 18,750 vehicles and warned of strict legal action for any further delay.

The letter was issued to intensify the campaign for collection of vehicle taxes from the defaulters.

Excise Lahore Director Muhammad Asif confirmed to Dawn that the department had dispatched letters to the presidents of 26 prominent banks, suggesting them to pay token taxes on the leased vehicles. He said the action was initiated following the reports that the number of vehicles leased out by the 26 banks had reached 18,750.

Of them, most vehicles, 5,022, belonged to the Habib Bank, followed by 2,523 of the Bank of Punjab and 2,211 of the Bank Alfalah.

He said the department had shown its grave concern at the banks’ failure to fulfill their responsibility in ensuring timely token tax payments.

Warns of 100pc fine, cancellation of registration, confiscation

Despite collecting monthly installments, often with interest, on these leased vehicles, the banks have purportedly neglected to remit the requisite token taxes or prompt borrowers to do so, Mr Asif said. He declared it a final warning issued by the excise department to the banks, highlighting the imminent legal consequences in case of non-compliance.

Notably, repeated notices have been issued prior to this, urging the banks to fulfill their tax obligations without delay. The excise department has also warned of cancelling registration of the delinquent vehicles and imposing a 100pc fine.

Moreover, legal measures, including the potential confiscation of bank property, loom large as punitive action against non-compliant banks were also intimated through the letter. A grace period of 14 days has been granted for the settlement of token taxes.

Published in Dawn, April 22nd, 2024