Govt Imposes Capital Value Tax on Cars Above 1300cc

The Federal Government has imposed Capital Value Tax (CVT) on cars with 1300cc engine capacity or above. According to the details, the Federal Government will no longer charge Capital Value Tax (CVT) on cars above Rs. 5 million and instead charge this tax on vehicles based on their engine capacity.

In the Finance Bill 2022-23, the Federal Government had announced a 2% CVT on vehicles above Rs. 5 million, but the Federal Board of Revenue (FBR) ended up reducing this to 1%. However, the FBR seems to have further changed the conditions of the new tax, which will now be implemented on cars above 1300cc.

According to the details, the Capital Value Tax will now be imposed on cars with engines above 1300cc and Electric vehicles (EVs) with battery over 50KWH. This means that several popular vehicles will now fall under this new tax, including:

• Toyota Yaris
• Toyota Corolla
• Changan Alsvin
• Honda Civic
• Honda City Aspire
• Kia Sportage
• Hyundai Tucson
• Kia Stonic
• and more.

The one company that seems to be unaffected by the Capital Value Tax (CVT) is Pak Suzuki Motor Company (PSMC), which doesn’t offer any car above 1300cc. In addition to the new tax, the car manufacturers are already expected to raise prices of their vehicles due to the fluctuation in USD to PKR rates.

What do you think about Capital Value Tax (CVT) being imposed on cars above 1300cc? Let us know in the comments below.

Read more: Pak Suzuki Announces Increase in Advance Tax On Its Cars.

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