The federal government has enacted a 1 percent Capital Value Tax (CVT) on cars with engines larger than 1300cc and electric vehicles (EVs) with battery packs larger than 50 kWh, effective from July 1, 2022.
It must be noted that the government had initially suggested 2 percent CVT on vehicles with price tags over Rs. 5 million. Its purpose was to apply taxes on high-end vehicles with smaller turbocharged engines such as Proton X70, MG HS, Haval Jolion, H6, etc.
The proposal was later reduced to 1 percent CVT on cars with engine displacement over 1300cc. According to various reports, FBR had reduced the CVT from 2 percent to 1 percent to benefit the public. However, the market notion is the new tax will make matters worse for economy-car buyers.
The cars that do not fall under the CVT net are as follows:
- Suzuki Alto
- Wagon R
- Cultus
- Swift
- Bolan
- Ravi
- Kia Picanto
- United Bravo
- Alpha
- Prince Pearl
- Proton Saga (1298cc)
- Honda City 1.2
- Peugeot 2008
Apart from the aforementioned list, all cars with engine capacity over 1300cc will be subject to 1 percent CVT.
No govt has ever done nor will, in future ,do things for ‘ the common man ‘ and all govts have done and continue to do things for the rich . This is the answer to the question ‘” Pakistan ka matlab kya “
Will this be applicable on new purchase or existing vehicles as well?