Understanding Pakistan’s sales tax system can be daunting, especially with its various authorities and rates. This article aims to simplify it for you, outlining the key aspects and answering your questions:
Types of Sales Tax:
- Sales Tax on Goods (SST 1990): Applicable to physical goods sold or supplied within Pakistan, collected by the Federal Board of Revenue (FBR). The current rate is 18%.
- Sales Tax on Services: Devolved to the provinces, each with its own authority and rate:
- Punjab: Punjab Revenue Authority (PRA) – 16%
- Sindh: Sindh Revenue Board – 13%
- Khyber Pakhtunkhwa: Khyber Pakhtunkhwa Revenue Authority (KPRA) – 15%
- Balochistan: Balochistan Revenue Authority (BRA) – 15%
- Islamabad Capital Territory: Islamabad Capital Territory (ICT) Act – 15%
Who Pays Sales Tax?
- For Goods: Anyone supplying goods within Pakistan must register with FBR and collect sales tax.
- For Services: Anyone providing taxable services within a specific province must register with the respective provincial authority.
Registration and Returns:
- Each authority has its own registration process and online portal for filing monthly returns.
Additional Points:
- Imports are subject to customs duty and sales tax.
- Exports are generally exempt from sales tax.
- Specific exemptions and reductions may apply depending on the goods or services.
Key Takeaways:
- Pakistan’s sales tax system involves both federal and provincial authorities.
- The applicable rate and authority depend on the type of goods or services and location.
- Registration and timely filing of returns are crucial for compliance.
Remember:
- This article provides general information and is not a substitute for professional tax advice.
- Consult with a tax advisor for specific guidance based on your individual circumstances and business activities.
By understanding these basics and seeking professional guidance if needed, you can navigate Pakistan’s sales tax system with greater ease and confidence.
