FBR freezes bank accounts of leading businessmen, bankers for CVT recovery

FBR freezes bank accounts of leading businessmen, bankers for CVT recovery

KARACHI: Federal Board of Revenue (FBR) has attached bank accounts of leading businessmen and bankers of the country for recovery of capital value tax (CVT) on immovable properties abroad.

Sources in FBR on Friday said that recovery notices had been issued to at least 15 super rich persons through attachment of bank accounts. These persons have immovable properties outside Pakistan and liable to pay CVT.

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An official at Large Taxpayers Office (LTO) Karachi told PkRevenue that the FBR had taken action against 15 super rich persons across the country. Out of 15 persons, the LTO Karachi has jurisdiction over eight persons.

The sources said that the bank accounts of 15 persons had been attached for CVT recovery. “An amount of Rs450 million is recoverable from such persons,” the sources said, adding that the action has been initiated on the directives of the prime minister.

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The prime minister directed the tax authorities to ensure tax recovery from defaulters.

The CVT was imposed through Finance Act, 2022 at one per cent of the value on the foreign assets of a resident individual where the value of such assets on the last day of the tax year in aggregate exceeds Rs100 million.

According to the FBR an inclusive definition of the foreign assets has been provided which, inter alia, includes assets held abroad indirectly and under the beneficial ownership by the resident individual.

“The value of foreign assets will be the total cost of the foreign assets on the last day of the tax year in relevant foreign currency which is converted into rupees as per exchange rates notified by State Bank of Pakistan (SBP) for the said day.

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“In case the cost of foreign assets cannot be determined with reasonable accuracy, the fair market value on the last day of tax year will be taken for this purpose and rupee conversion is applied in the aforesaid manner. The resident person holding foreign assets will pay CVT at the time the income tax return for the tax year is due,” the FBR said.

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It further added that the officer of Inland Revenue has been empowered to pass an appealable order to recover CVT along with default surcharge from a person who fails to pay CVT or to collect CVT or fails to pay to the credit of the Federal Government after having collected CVT, by holding the person personally liable in this regard.

The sources said that the FBR likely to make public all the names of CVT defaulters in coming days.