Islamabad, June 2, 2025 – The government of Pakistan is likely to reintroduce Capital Value Tax (CVT) on movable assets in the upcoming federal budget for fiscal year 2025-26. Highly placed sources revealed on Monday that the proposed tax will specifically target the country’s wealthiest individuals, aiming to tap into movable assets such as cash, gold, savings, and investments.
According to insiders, the CVT may be imposed at a nominal rate but its psychological and financial impact could be significant. The plan is part of a broader effort to boost tax revenues and appease the International Monetary Fund (IMF) ahead of the federal budget announcement scheduled for June 10, 2025.
If approved, this will mark a dramatic revival of CVT on domestic movable assets, a concept that was previously applied only to foreign holdings and vehicles held in Pakistan through the Finance Act, 2022. The new proposal would bring under its net a wide range of assets, including prize bonds, bank balances, mutual funds, jewelry, and more—calculated on values as of June 30 each fiscal year.
Currently, CVT is applicable only on foreign assets exceeding Rs100 million and on movable assets such as motor vehicles with high engine or battery capacity. However, the government is now preparing to extend the scope to local assets, signaling a significant shift in its taxation policy.
Officials say the Finance Bill 2025-26 may invoke provisions from the century-old Income Tax Act of 1922 to validate the expansion. The potential imposition of CVT on local movable assets is expected to create ripples across financial markets and among the elite asset holders of the country.
This sweeping change, if implemented, could redefine wealth taxation in Pakistan—placing movable assets under unprecedented scrutiny and opening a new chapter in fiscal enforcement.
Analysts warn this CVT move may trigger legal challenges, capital flight, and increased scrutiny of wealth declaration by high-net-worth individuals.