Under the revised Finance Bill 2022, the Federal Board of Revenue (FBR) cut the capital value tax (CVT) on automobiles from two percent to one percent.
The FBR has suggested a tax on the capital value of particular assets under the Finance Bill 2022. On the value of assets at the specified rates, a tax to be known as the capital value tax 2022 shall be assessed, charged, and collected. When a vehicle’s worth reaches Rs. 5 million, capital value tax must be paid on it if it is kept in Pakistan.
According to sources, a revision to the Finance Bill 2022 has lowered the CVT from two to one.
The method to estimate the value of the cars has also been offered by the FBR. When a motor vehicle is imported into Pakistan, the customs duties raise the import value determined by the customs officials.
The price at which the motor vehicle is sold by the local manufacturer or assembler when it is made or assembled locally in Pakistan.
The value of the motor vehicle mentioned shall decrease by 10% annually starting at the end of the fiscal year in which the motor vehicle is acquired, regardless of whether the vehicle is purchased at auction or not, or in any other situation, the total consideration paid to acquire, modify, or improve the vehicle.
When a motor vehicle is imported, the customs collector is required to collect tax at the appropriate rate on the import value that has been enhanced by customs charges.
According to FBR, the local manufacturer or assembler is required to charge the purchaser of a motor vehicle tax based on the sale price at the rate indicated in the First Schedule.