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!



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