Karachi, June 5, 2025 – A leading tax expert has strongly supported the implementation and expansion of the Capital Value Tax (CVT) in the upcoming federal budget 2025-26 as a strategic measure to broaden Pakistan’s tax base and improve equity in the tax system.
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KCCI raises concerns over retrospective CVT implementation on motor vehicles
Karachi Chamber of Commerce and Industry (KCCI) has taken a stand against the retrospective implementation of the Capital Value Tax (CVT) on the transfer of motor vehicles. President of KCCI, Mohammed Tariq Yousuf, has assured members of the Automotive Traders & Importers Association (ATIA) that the issue will be raised and addressed.
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FBR exempts CVT on assets of Reko Diq Mining Company
KARACHI: Federal Board of Revenue (FBR) on Monday exempted capital value tax (CVT) on all assets of Reko Diq Mining Company.
The FBR issued SRO 2200(I)/2022 to announce that the federal government had exempted all assets of the Reko Diq Mining Company (Private) Limited (formerly) Tethyan Copper Company Pakistan (Private) Limited from the whole of the capital value tax payable under sub-section of section 8 to the Finance Act, 2022.
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It is worth mentioning that the Economic Coordination Committee of the Cabinet (ECC) a day earlier took important decisions regarding Reko Diq.
The ECC considered and approved two important agenda items related to Reko Diq project, thus paving the way for early start of the Reko Diq Project. Ministry of Energy (Petroleum Division) submitted a summary on accrued interest with respect to the amount held in an escrow account in connection with the Reko Diq Project dispute settlement.
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It was presented that government of Pakistan (GoP) and Provincial Government of Baluchistan (GoB) entered into an out-of-court dispute settlement with M/s Tethyan Copper Company Pvt Limited- a consortium of Barrick Gold Corporation of Canada and M/s Antofagasta PLC of Chile, in respect of Reko Diq Copper-Gold Project in Chaghai district of Baluchistan.
As per settlement terms, Government of Pakistan has to clear liabilities to Antofagasta PLC. In the light of the terms of agreed settlement, the ECC allowed Finance Division to direct GHPL (for its own as well as GoB’s share), OGDCL and PPL to deposit the aggregate amount of interest to the sum of US$ 22,718,173/- in the escrow account from March 31, 2022 to December 15, 2022.
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The ECC further allowed Finance Division to arrange the interest payable for GoB’s share amounting to US$ 8,519,314 /- from the loan of Rs. 65 billion already raised by the GHPL with the GoP guarantee.
Further, the ECC allowed the concerned Divisions of GoP and the SOEs to act in such a manner to ensure that the deposited amount alongwith interest deposited by the SOEs in the escrow account to form part of the consideration for share purchase of Reko Diq Mining Company Limited.
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The ECC also considered and approved a proposal of Finance Division through a summary on funding plan of Government of Pakistan for share of Government of Baluchistan in Reko Diq Project.
As per proposal, overall funding commitment of US$ 717 million over the period of 6 years by GoP in respect of GoB SPV Project Capital Commitment to be provided by the Government of Pakistan.
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FBR issues procedure, collection of capital value tax
ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday issued procedure and collection of capital value tax (CVT).
The government through Finance Act, 2022 imposed capital value tax on sale of immovable properties and motor vehicles.
Following are the procedure and collection of the CVT.
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Declaration of assets. – (1) Every person who is liable to pay capital value tax on assets mentioned in clauses (b) and (c) of sub-section (2) of section 8 of Finance Act, 2022 shall file the electronic declaration in Iris as set out in the Form- A attached to these rules.
(2) The value of foreign assets shall be converted in rupees as per ready transactions exchange rates for mark to market revaluation notified by the State Bank of Pakistan applicable for the last day of the tax year.
Statements to be filed by persons collecting capital value tax on motor vehicle. – (l) Every motor vehicle registration authority or a manufacturer or a person selling motor vehicle through auction liable to collect CVT in respect of motor vehicle in Pakistan shall furnish to the Commissioner a quarterly electronic statement in Iris as per schedule mentioned in sub-section (2) of section 165 of the Ordinance.
(2) Every person liable to collect CVT in respect of motor vehicle in Pakistan shall also furnish to the Commissioner an annual electronic statement in Iris for the relevant tax year within thirty days of the end of tax year, in addition to statement to be filed under sub-rule (1) of this rule.
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(3) The provisions of sub-sections (2A), (2B) and (4) of section 165 of the Ordinance shall, in so far as relevant, apply to statements filed under this rule.
(4) The statement shall be filed in the manner as provided in Iris.
Collection of capital value tax. (1) The tax required to be collected by a registration authority, manufacturer or a person selling motor vehicle through auction shall be paid by way of credit to the Federal Government through a computerized payment receipt (CPR) or SWAPS payment receipt (SPR) as set out in the Form ‘B’ attached to these rules.
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(2) The person required to pay tax in respect of foreign assets or assets specified by the Federal Government shall pay tax by way of credit to the Federal Government through a computerized payment receipt (CPR) at time the income tax return for the tax year is due for payment of tax on foreign movable assets, as set out in the Form ‘C-l’ and for payment of tax on foreign immovable assets, as set out in the Form ‘C-2’ appended to these rules.
(3) All sums being capital value tax collected under section 8 of the Finance Act, 2022, shall be paid by way of credit to the Federal Government by remittance into the government treasury or in the authorized branches of the State Bank of Pakistan or the National Bank of Pakistan, –
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(i) on the same day in case these have been collected by or on behalf of government;
(ii) in other cases, such amount shall be paid within one week from the date of such collection.