Turnover tax is a type of indirect tax that is levied on the value of goods and services sold by businesses. In Pakistan, turnover tax is levied at a rate of 1.25% on the turnover of businesses.
Who is Subject to Turnover Tax in Pakistan?
Turnover tax is payable by all businesses that have a turnover of Rs. 100 million or more. Businesses with a turnover of less than Rs. 100 million are not subject to turnover tax.
How is Turnover Tax Calculated in Pakistan?
Turnover tax is calculated by multiplying the turnover of a business by the applicable tax rate. For example, if a business has a turnover of Rs. 100 million, the turnover tax payable will be Rs. 1.25 million.
When is Turnover Tax Payable in Pakistan?
Turnover tax is payable on a quarterly basis. Businesses are required to file a turnover tax return with the Federal Board of Revenue (FBR) within 30 days of the end of each quarter.
What are the Penalties for Non-Payment of Turnover Tax in Pakistan?
Businesses that fail to pay turnover tax on time are liable to pay penalties. The penalties for non-payment of turnover tax are as follows:
- Late payment penalty: 1% of the amount of tax due for each day of delay.
- Interest: 10% of the amount of tax due per annum.
- Prosecution: Businesses that fail to pay turnover tax for a period of more than one year may be prosecuted by the FBR.
Turnover tax is an important source of revenue for the government of Pakistan. Businesses that are subject to turnover tax are required to file a turnover tax return with the FBR within 30 days of the end of each quarter. Businesses that fail to pay turnover tax on time are liable to pay penalties.
Here are some additional tips for businesses that are subject to turnover tax:
- Keep good records of your turnover. This will help you to calculate the amount of turnover tax that you are liable to pay.
- File your turnover tax return on time. This will help you to avoid penalties.
- If you are unable to pay your turnover tax on time, contact the FBR to discuss payment arrangements.