Under the amended Finance Bill 2022, the Federal Board of Revenue (FBR) has reduced the Capital Value Tax (CVT) on vehicles from 2% to 1%.
The FBR has proposed a tax on the capital value of certain assets, according to sources.
A tax, known as the Capital Value Tax 2022, will be levied, charged, and collected on the value of assets at the rates specified.
Where the value of a motor vehicle held in Pakistan exceeds Rs 5 million, a capital value tax will be levied. The FBR has also provided a procedure for determining the worth of the vehicles.
In the case of a motor vehicle imported into Pakistan, the Customs authorities assess the import value as increased by customs duties.
Where the vehicle is manufactured or assembled locally in Pakistan, the price at which the local manufacturer or assembler sells the vehicle.
If the vehicle is auctioned, the auction price; otherwise, the total consideration paid to acquire, alter, or improve the vehicle; the value of the motor vehicle mentioned shall be reduced by 10% for each year beginning with the end of the fiscal year in which the motor vehicle is acquired.
The Collector of Customs shall collect tax on the import value as increased by Customs duties at the rate specified at the time of importation of a motor vehicle. The FBR also stated that the local manufacturer or assembler must collect sales tax from the buyer of a motor vehicle at the rate specified in the First Schedule.
To read our blog on “FBR expected to reach FY22 tax collection goal of Rs. 6.1 trillion,” click here
