The Sindh Cabinet has approved major reforms to the province’s vehicle registration, taxation and insurance framework, including the suspension and eventual cancellation of registrations for vehicles with long-pending tax defaults.

The decisions were approved during a cabinet meeting chaired by Chief Minister Murad Ali Shah.

Under the new policy, owners of damaged, scrap or permanently unusable vehicles will have to apply for deregistration by September 30, 2026.

Vehicles that have failed to pay taxes or submit any declaration since July 2010 will be placed in the off-road category. Their registrations will be suspended after 30 days if outstanding dues remain unpaid, while continued nonpayment for 60 days will result in permanent cancellation.

The cabinet also approved a temporary registration holding facility for licensed motor dealers. Dealers purchasing vehicles for resale will be allowed to keep them unregistered for an initial period of six months, with the option of two additional three-month extensions, taking the maximum holding period to 12 months.

During this period, dealers will be required to pay a reporting fee of Rs. 100 per vehicle and maintain a valid dealership license.

The provincial government also approved changes to third-party motor insurance rules. Under the revised framework, insurance coverage will continue until its expiry date after a vehicle changes ownership, removing the requirement for buyers to obtain duplicate insurance during the transfer process.

The reforms, developed with input from regulators and the insurance sector, aim to improve vehicle records, increase tax compliance, reduce administrative hurdles and make ownership transfers easier for citizens.