Karachi, June 4, 2025 – The business community across Pakistan has issued a strong and united condemnation of the government’s reported plan to impose Capital Value Tax (CVT) on a broad range of movable assets in the upcoming Federal Budget 2025-26.
In what industry leaders are calling a “devastating blow” to investor confidence, recent reports suggest the government is preparing to extend the scope of CVT far beyond its current reach—no longer limited to locally manufactured high-end motor vehicles, but now encompassing all movable assets. This includes prize bonds, mutual funds, jewelry, bank balances, and more.
“The mere hint of taxing all movable assets through CVT is enough to trigger panic,” said a senior business leader. “Such measures would encourage capital flight, suppress legitimate financial disclosures, and open the floodgates for tax evasion.”
The plan, reportedly being crafted to appease the International Monetary Fund (IMF), is part of a larger revenue-boosting agenda. But business leaders warn that its psychological impact could far outweigh its fiscal benefits. If implemented, it would mark a dramatic return of CVT on domestic movable wealth—a tax that had largely faded from the policy landscape.
A recent report by PKRevenue revealed that the government may impose CVT at a seemingly nominal rate. However, insiders caution that the broader implications are anything but small. “Even a low rate on movable assets sends a loud message: the state is coming for your wealth,” remarked a concerned industrialist.
Experts note that globally, CVT is applied in only four OECD countries—Colombia, France, Norway, and Spain—and even there, it comes with high exemption thresholds. Regional economies like India, Bangladesh, and Vietnam have either abolished such wealth taxes or never implemented them at all.
Currently, CVT is only levied on foreign assets above Rs100 million and high-capacity motor vehicles. The proposed extension to domestic movable assets would be a radical shift in Pakistan’s tax regime, one that many fear will erode trust and destabilize financial systems just as the economy struggles to recover.
The business community has called on the government to immediately shelve the proposal and engage in meaningful consultation with stakeholders before making such high-impact fiscal decisions.