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Thursday, March 23rd, 2023

FBR Reduces Capital Value Tax on Vehicles Under Amended Finance Bill 2022

by June 26, 2022 General

The Federal Board of Revenue (FBR) has reduced capital value tax (CVT) on vehicles from 2 percent to one percent under the amended Finance Bill 2022.

Under the Finance Bill 2022, the FBR has proposed a levy of tax on the capital value of certain assets. A tax shall be levied, charged, and collected, to be called the capital value tax 2022 on the value of assets at the provided rates. The capital value tax shall be charged on the motor vehicle held in Pakistan where the value of the motor vehicle exceeds Rs. 5 million.

The FBR has also provided the procedure to determine the value of the vehicles. In the case of motor vehicles, where the vehicle is imported in Pakistan, the import value assessed by the Customs authorities is increased by customs duties.

Where the vehicle is manufactured or assembled locally in Pakistan, the value at which the motor vehicle is sold by the local manufacturer or assembler.

Where the vehicle is auctioned, the auction price; or in any other case, the total consideration paid to acquire, alter or improve the vehicle; the value of the motor vehicle mentioned shall be reduced by ten percent for each year from the end of the financial year in which the motor vehicle is acquired.

The Collector of Customs shall collect tax at the time of import of a motor vehicle on the import value as increased by customs duties at the rate specified.

Local manufacturer or assembler shall collect tax from the buyer of the motor vehicle on sale value at the rate specified in the First Schedule, FBR added.

Source: Pro Pakistan