Capital Value Tax Collection Skyrockets by Nearly 100x in FY23

The Federal Board of Revenue (FBR) has collected Capital Value Tax (CVT) of Rs. 10 billion under different heads during 2022-23 as compared to Rs. 104 million in 2021-2022, reflecting an extraordinary increase of 9,616.3 percent. According to the FBR’s data, the collection under the Workers Welfare Fund/Workers Profit Participation Fund and the Capital Value Tax has shown a substantial jump during 2022-23. The Capital Value Tax 2022 was imposed under Section 8 of the Finance Act, 2022 on different assets for tax year 2022 and onwards. In the case of a motor vehicle held in Pakistan, CVT is to be charged and collected from July 1, 2022. The CVT was imposed on motor vehicles held in Pakistan; foreign assets of resident individuals and such assets or class of assets as specified by the Federal Government through a notification in the official Gazette. The FBR’s data further revealed that the collection of Workers Welfare Fund/Workers Profit Participation Fund amounted to Rs. 50.346 billion during 2022-23 against Rs. 14.956 billion, reflecting an increase of 236.6 percent. Total collection of CVT/WWF/WPPF remained Rs. 60.451 billion during 2022-23 as compared to Rs. 15.060 billion, reflecting an increase of 301.4 percent.