Automotive News

Government Has Imposed 1% Capital Value Tax (CVT) On Cars Above 1300cc

Government Has Imposed 1% Capital Value Tax (CVT) On Cars Above 1300cc

July 6, 2022 / By Zunair Tahir / Automotive News

Beginning on July 1st, 2022, the government will apply a 1 percent Capital Value Tax (CVT) on all vehicles with engines larger than 1300 cc and battery packs larger than 50 kWh.

In an effort to include automobiles with relatively tiny yet turbocharged engines under the tax net, the government had earlier suggested a 2 percent CVT on vehicles with price tags exceeding PKR 5 Million, according to the details. Later, the plan was scaled back to a 1% CVT.

READ MORE: MG 3 Will Debut In Pakistan With Less Than 2 Million?

The Finance Act 2022–23, on the other hand, significantly alters how this new Capital Value Tax is portrayed. Then how?


  • Changan Alsvin
  • Toyota Yaris
  • Honda City (1.5L variants)
  • Toyota Corolla
  • Honda Civic
  • KIA Stonic
  • KIA Sportage
  • Hyundai Tucson
  • Proton X70
  • Chery Tiggo 4 Pro
  • Chery Tiggo 8 Pro
  • Changan Oshan X7
  • KIA Sorento
  • DFSK Glory 580 Pro
  • Hyundai Elantra
  • Hyundai Sonata
  • Haval Jolion
  • Haval H6

The tax requirements are now predicated on the engine displacement above 1300cc, and the price tag beyond PKR 5 Million is therefore wholly meaningless. Although FBR’s decrease of CVT from 2% to 1% was to the benefit of customers, these recent conditions mean that the impact on consumers will be considerably greater.

Although there has been a significant rise in the number of automobiles brought into the CVT tax net, the value of tax collection has undoubtedly decreased. Thus, the government benefits from this arrangement!


The Long Wait Is Over! Pakistan’s Auto Policy for the Years 2021-2026 Is Here

The Long Wait Is Over! Pakistan’s Auto Policy for the Years 2021-2026 Is Here

July 7, 2021 / By Zunair Tahir / Automotive News

Auto Policy has finally been revealed by the federal government. Khusro Bakhtiar, the Federal Minister for Industries and Production, spoke during a news conference on the new strategy.

We’ve been hearing a lot of stories and speculations concerning automobile price increases in Pakistan. Despite repeated warnings, the situation for automobile users in the country remained uncertain. The wait, however, is now over. Pakistan’s new Auto Policy 2021-2026 has been announced by the government. According to the information given, there is undoubtedly good news for automobile aficionados. Furthermore, the new Auto Policy is good news for automobile buyers in the lower middle and middle classes. Let’s go straight into the specifics!

Impact On Cars

Vehicle Prices Have Dropped

The long-awaited decision has finally arrived. Vehicle costs have been decreased as a result of the new Auto Policy. Vehicles with engines up to 850cc would have their costs reduced to as low as PKR 105,000 under the new policy. When it comes to 1000cc vehicles, costs might drop as low as PKR 146,000. Furthermore, if we look at the Toyota Yaris and Honda City in particular, the costs will drop by up to PKR 125,000.

Here is the Auto Policy for the Years 2021-2026.

  • In the following 1-2 days, new car prices will be applied.
  • To put an end to the “ON Money” mentality, the buyer must register the vehicle in his or her own name.
  • 3,75,000 new employment will be created in the auto industry.
  • The auto sector has a production capacity of 4,15,000 vehicles per year. Pakistan manufactured 1,64,000 cars last year.
  • Cars with engines up to 850cc will have their prices reduced by up to Rs. 105,000.
  • 1000cc rates would be reduced by up to Rs140,000.
  • For one year, the import tariff on electric vehicles (EVs) would be cut from 25% to 10%.
  • If the automobile is delayed for more than 60 days (2 months), the firm will be charged KIBOR + 3%.
  • The automobile industry is taxed to the tune of Rs350 billion.
  • The government is working on a policy for auto development and export. Not only will the policy be focused on the domestic market.



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