The government has proposed abolishing the Capital Value Tax (CVT) imposed on foreign assets in the Finance Bill.
According to budget documents, the tax on foreign assets had not been effective in achieving its core objectives and was discouraging individuals from declaring assets held abroad.
The government maintains that disclosed foreign assets are already part of the documented financial record and are taxed accordingly. Therefore, the continuation of CVT was seen as an obstacle to the voluntary declaration of assets.
The Finance Bill states that removing this tax is expected to encourage Pakistani citizens to declare their foreign assets and financial holdings formally. This, in turn, is likely to improve tax compliance, promote a documented economy, and potentially increase government revenues.
