Pakistan is contemplating an expansion of the scope of the Capital Value Tax (CVT) to encompass all movable assets, sources said on Wednesday May 17, 2023.
The move comes as the country grapples with a significant revenue shortfall and mounting expenditures, prompting the government to explore additional revenue measures for the upcoming fiscal year 2023-2024.
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In the previous budget for 2022-2023, the government introduced significant amendments through the Finance Act of 2022, imposing CVT on motor vehicles and foreign assets held by resident individuals. Additionally, provisions were introduced last year regarding deemed income from immovable properties.
Sources indicate that the government may introduce new provisions relating to CVT on all movable assets. To implement this, they may adopt a similaar approach as used in the Income Support Levy Act of 2013.
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Under the support levy, movable wealth was defined as the amount by which the aggregate value of a person’s movable assets, as declared in the wealth statement for the relevant tax year, exceeded the aggregate value of all liabilities owed by that person on the closing date of the tax year.
Upon contacting officials at the Federal Board of Revenue (FBR), they were unable to provide a response due to the secretive nature of the budget-making process.
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The potential expansion of CVT to include all movable assets aims to enhance the government’s revenue collection efforts. However, the specific details and implications of such an expansion are yet to be disclosed.
As the budget-making process continues, it remains to be seen whether these proposals will be incorporated into the final budget for the fiscal year 2023-2024. Any developments in this regard will be closely monitored by stakeholders as they assess the potential impact on taxpayers and the overall economy.
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(Please note that the information provided is based on sources and the government’s official response is currently unavailable.)
