The Sindh Cabinet has approved sweeping reforms to the vehicle registration, taxation and insurance system, introducing a deregistration policy for off-road vehicles, stricter action against tax defaulters and new relief measures for licensed motor dealers.
The decisions were approved during a cabinet meeting chaired by Chief Minister Syed Murad Ali Shah on Wednesday as part of reforms to the vehicle administration framework of the Excise Department.
Under the new deregistration policy, owners of damaged, scrap or otherwise unserviceable vehicles must apply for deregistration by September 30, 2026. Vehicles that have neither paid taxes nor submitted any declaration since July 2010 will be classified as off-road.
The approved policy provides that the registration of off-road vehicles with outstanding tax liabilities will be suspended after 30 days. If dues remain unpaid, their registration will be cancelled after 60 days.
The cabinet also introduced a holding period facility for licensed motor dealers purchasing vehicles for resale. Dealers will be allowed to retain such vehicles without registration for an initial six months, with two extensions of three months each, subject to a maximum holding period of 12 months.
During the holding period, dealers will pay a reporting fee of Rs100 per vehicle, while their dealership licence must remain valid.
The cabinet also approved changes to motor third-party insurance rules. Under the revised policy, third-party insurance will remain valid until its expiry date even after ownership of a vehicle is transferred.
According to officials, the change will remove the need for buyers to purchase duplicate insurance for the same vehicle, reducing costs for vehicle owners.
The reforms were supported by the Securities and Exchange Commission of Pakistan (SECP), the Central Depository Company (CDC) and the insurance industry. The chief minister said the measures are intended to improve administrative efficiency, transparency and public convenience.
