Islamabad, October 5, 2025 — The Federal Board of Revenue (FBR) has collected Rs7.70 billion as Capital Value Tax (CVT) on motor vehicles during the fiscal year 2024–25, marking a slight decline from Rs7.80 billion collected in the previous fiscal year.
The CVT on motor vehicles was introduced through the Finance Act 2022, aimed at broadening the tax base and generating additional revenue from high-value assets. The tax applies at a 1% rate on the value of motor vehicles held in Pakistan that exceed 1300cc engine capacity, or in the case of electric vehicles, where the battery capacity exceeds 50kWh.
According to the FBR, the value of motor vehicles for CVT purposes is assessed differently depending on their source:
• Imported vehicles: The CVT is collected at the import stage based on the value assessed by Customs authorities, including all applicable duties and taxes.
• Locally manufactured or assembled vehicles: The CVT is based on the ex-factory price inclusive of all duties and taxes, collected by the manufacturer or assembler.
• Auctioned vehicles: The CVT is calculated on the final auction price, inclusive of duties and taxes, collected by the auction organizer.
The law also provides depreciation benefits — the taxable value of a motor vehicle decreases by 10% each year, and no CVT is applicable after five years from the date of import, purchase, or auction.
Furthermore, every Motor Vehicle Registration Authority is required to collect CVT at the time of registration or transfer of ownership, unless the tax was already paid at an earlier stage. This ensures that CVT is captured on each transaction occurring within five years, strengthening compliance and contributing to sustained revenue generation for the national exchequer.