The Sindh Cabinet has approved major reforms to the province’s vehicle registration, taxation and insurance systems.
Chief Minister Syed Murad Ali Shah chaired the meeting, which considered more than 20 agenda items. Provincial ministers, advisers, special assistants and senior government officials attended.
Chief Secretary Asif Hyder Shah and Principal Secretary Agha Wasif Abbas were also present.
The cabinet reviewed matters involving governance, public administration, infrastructure, education, healthcare, labour welfare and economic reforms.
Its vehicle-related decisions introduce a formal process for removing destroyed and long-unused vehicles from government records.
“The reforms aim to make the vehicle registration system more transparent and efficient while improving administrative oversight,” Shah said.
Unpaid Tax Could Lead to Registration Cancellation
The cabinet approved a new de-registration policy for destroyed, permanently unusable or decommissioned vehicles.
Owners of such vehicles must submit a written declaration to the relevant authorities by September 30, 2026.
Authorities will classify a vehicle as off-road if its owner meets two conditions. The owner must not have paid motor vehicle tax since July 2010 and must also fail to submit the required declaration.
Officials will give affected owners 30 days to clear their outstanding dues. If they fail to pay, the Excise Department will suspend the vehicle’s registration.
Continued non-payment for another 60 days will result in the cancellation of the registration. The policy aims to separate active vehicles from those that no longer operate.
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The Sindh Excise Department already offers online services for vehicle registration, verification and motor vehicle tax calculations.
The cabinet also approved relief for licensed motor dealers. Dealers may keep vehicles purchased for resale without immediate registration for six months.
They may seek two further extensions of three months each. However, the total holding period cannot exceed 12 months.
Dealers must maintain a valid motor dealer licence during this period. They must also pay a reporting fee of Rs100 for each vehicle.
Insurance to Remain Valid After Vehicle Sale
The cabinet also revised rules governing Motor Third Party Insurance after a vehicle changes ownership.
An existing third-party insurance policy will remain valid until its expiry, even after the vehicle transfers to a new owner.
The buyer will not need to purchase another policy immediately after completing the transfer. Officials said the change would prevent duplicate costs and simplify vehicle sales.
Sindh made third-party liability insurance mandatory earlier in 2026. The law links valid coverage with vehicle registration, ownership transfers and annual tax payments. Motorcycles and other two-wheelers remain exempt.
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The amended law provides no-fault compensation of Rs700,000 for death. It also offers up to Rs500,000 for several forms of permanent disability.
Active third-party policies in Sindh increased from 11,200 in March to 165,064 by the end of June 2026, according to SECP figures.
Officials said the latest reform had received in-principle support from the SECP, Central Depository Company and Insurance Association of Pakistan.
“The measures will improve public convenience, strengthen transparency and streamline the province’s vehicle registration system,” the chief minister said.
