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Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. •

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Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. •

Gold and Precious Metals Taxation in Pakistan: Customs, Sales Tax, and Capital Gains Explained

This article explains how gold and precious metals are taxed in Pakistan, including customs duties, sales tax on jewellery, capital gains rules, and penalties for smuggling or non-compliance. It also covers FBR recovery provisions and exemptions that apply to individuals, importers, and businesses.

Quratul Ain
August 25, 2025
Tax Toolkit

Gold, silver, and other precious metals hold immense cultural and financial value in Pakistan. However, these items are also strictly regulated under customs, sales tax, and income tax laws. Understanding the taxation framework is essential for jewellers, investors, importers, and even individuals carrying precious items while traveling.

This article provides a clear breakdown of how gold and precious metals are taxed in Pakistan, including customs duties, sales tax on jewellery, capital gains tax, advance tax on imports, and recovery provisions, along with penalties for smuggling or non-compliance.

1. Customs Duties and Smuggling Penalties

The government imposes strict controls on the import, export, and handling of gold, silver, platinum, palladium, precious stones, and related articles.

Definition and Scope of Smuggling: Smuggling encompasses a broad range of precious items, including gold bullion, silver bullion, platinum, palladium, radium, precious stones, antiques, currency, narcotics, and manufactures of gold or silver or platinum or palladium or radium or precious stones if their value exceeds 500,000 rupees. This broad definition underscores the comprehensive nature of anti-smuggling efforts.

Escalating Penalties for Smuggling: Penalties for smuggling are directly tied to the value of the goods, ranging from confiscation to substantial fines, imprisonment, and forfeiture of assets.

Minor Smuggling (Up to US $10,000): Confiscation of the goods and penalty not exceeding the value of the goods.
Moderate Smuggling (US $10,001 to US $50,000): Penalties escalate to not exceeding three times the value, plus imprisonment.
Major Smuggling (Exceeding US $100,000): The most severe penalties are applied, including a penalty not exceeding ten times the value, imprisonment for a term not less than five years, and forfeiture of property.

Specific Penalties for Undeclared Baggage: Passengers failing to declare or incorrectly declaring precious items in their baggage face similarly structured, escalating penalties.

Smaller Quantities (Up to 15 tola gold): Confiscation and a fine equal to the value of the goods.
Larger Quantities (Exceeding 500 tola gold): Confiscation, a penalty not exceeding ten times the value, imprisonment for a term not less than three years, and forfeiture of property.

Burden of Proof: For gold or silver bullion, the onus of proving that such bullion was obtained by processing or other means in Pakistan (and not by smuggling) lies with the person making that claim. This shifts the responsibility to the individual to demonstrate legal acquisition.

Regulation of Business and Conveyance Confiscation: The Federal Government has the authority to regulate business in, or connected with, gold or silver or precious stones or ornaments made of them, especially near borders. Furthermore, Any conveyance used for the irregular import or export of goods, including smuggled gold or precious items, is liable to confiscation.

2. Sales Tax on Precious Metals and Jewellery

Sales tax rules vary depending on the form of gold or jewellery:

Exemption for Monetary Gold: Monetary gold is specifically exempt from sales tax. This suggests a policy to not tax gold used for monetary purposes or as a store of value.
Sales Tax on Jewellery: Local supplies of articles of jewellery, or parts thereof, of precious metal or of metal clad with precious metal are subject to a 3% sales tax rate, with no input tax adjustment allowed for this tax. This indicates that jewellery is treated as a consumer good with a clear sales tax liability.
Exclusion of Un-worked Gold from Value Addition Tax: Gold, in un-worked condition, is specifically excluded from the value addition tax levied and collected at the import stage. This suggests a focus on taxing processed or finished products rather than raw materials at the import stage for value-added tax purposes.
Tax on Sale of Gold and Silver: A 1% tax is levied on the payment for the sale of gold and silver and articles thereof, which is adjustable. This implies a transaction-based tax on the general sale of gold and silver, which can be offset.

3. Income Tax and Capital Gains

For income tax purposes, precious metals and jewellery are treated as capital assets:

Jewellery as a Capital Asset: Jewellery is considered a capital asset’. This classification means that any gain from its disposal is generally subject to capital gains tax unless specifically exempted. The cost of acquisition of the security is deducted from the consideration received on disposal to compute the gain.
Advance Tax on Gold Imports: Persons importing gold are required to pay advance tax at a rate of 1% of the import value. This advance tax is generally considered a minimum tax on the income of the importer from these imports, with exceptions for industrial undertakings and certain government entities or diplomats.

Income and Capital Gains Tax Rates

The tax rate applicable to capital gains on gold aren’t mentioned separately in Income Tax Ordinance. Gains on Sale of Gold and other precious metals will be added to your remaining income and will be taxed at following rates effective from July 1, 2025 till June 30, 2026.

Total Income (PKR)	Tax Rates(PKR)
Up to 600,000	Exempt
600,001 – 1,200,000	15%
1,200,001 – 1,600,000	90,000+20.0% on above 1.2 million
1,600,001 – 3,200,000	170,000+30.0% on above 1.6 million
3,200,001 – 5,600,000	650,000+40.0% on above 3.2 million
5,600,001 & Above	1,610,000+45.0% on above 5.6 million

4. Tax Recovery Powers and Exemptions

The government possesses significant powers to recover unpaid taxes, though certain personal items are protected.

Broad Powers of Tax Recovery: For tax recovery, the Commissioner can attach and sell any movable or immovable property of the taxpayer, appoint a receiver, or even arrest and detain the taxpayer. They can also compel third parties to pay amounts owed to the taxpayer directly to the Commissioner.
Exemptions from Attachment: Despite these broad powers, necessary wearing apparel, cooking vessels, beds and bedding of the defaulter, his wife and children, and such personal ornaments as, in accordance with religious usage, cannot be parted with by any women are exempt from attachment and sale for tax recovery. This provision highlights a consideration for basic necessities and cultural/religious practices in tax enforcement.

Glossary of Key Terms

Smuggling: The act of irregularly importing or exporting goods, specifically including gold bullion, silver bullion, platinum, palladium, radium, precious stones, antiques, currency, narcotics, and manufactures of these items, when their value exceeds five hundred thousand rupees.
Confiscation: The seizure of goods by the authorities as a penalty for an offense, such as smuggling.
Forfeiture of assets: The loss of movable and immovable property as a penalty, often applied in cases of severe smuggling or non-compliance.
Onus of Proof: The burden or responsibility of providing evidence to support a claim or assertion, especially in legal proceedings. In this context, it refers to the requirement for a person to prove the legitimate origin of gold or silver bullion.
Monetary Gold: Gold classified under specific Customs Act Heading Nos. (7108.1390 and 7108.2090) that is exempt from sales tax, typically referring to gold held as a financial asset.
Input Tax Adjustment: The process where a business can deduct the sales tax paid on its purchases (inputs) from the sales tax it collects on its sales (outputs).
Value Addition Tax: A tax levied on the increase in value of a product or service at each stage of production or distribution.
Capital Asset: For income tax purposes, an item of property or an investment, such as jewellery, from which a gain or loss can arise upon its disposal.
Capital Gains: The profit realized from the sale of a capital asset that has appreciated in value. This gain is generally subject to income tax.
Advance Tax: Tax paid in anticipation of a future tax liability, often collected at the time of an transaction such as import.
Minimum Tax: A tax liability that an entity must pay regardless of deductions, usually set as a percentage of gross income or a specific transaction value.
Recovery Proceedings: Legal or administrative actions taken by a tax authority (e.g., Commissioner) to collect unpaid taxes from a taxpayer.
Attachment (of property): The legal process of seizing a debtor’s property to satisfy a judgment or tax debt.
Conveyance Confiscation: The seizure of any vehicle, vessel, or other means of transport used in the commission of an offense, such as smuggling.

Conclusion

Taxation of gold and precious metals in Pakistan is a multi-layered framework that includes customs duties, sales tax, income tax, and strict smuggling penalties. While the laws are tough on non-compliance, they also recognize exemptions for personal essentials and cultural traditions.

For jewellers, investors, and importers, understanding these rules is critical to remain compliant and avoid severe financial or legal consequences.

Quratul Ain

Content Writer at TaxationPk, responsible for creating engaging and informative content on taxation in Pakistan. Dedicated to making complex tax matters accessible through well-researched and compelling articles.

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