Attention hotels, restaurants, caterers, and other food service businesses in Pakistan! The Khyber Pakhtunkhwa Revenue Authority (KPRA) has outlined specific tax rates and exemptions for your industry.
Standard Rate:
- 15% Sales Tax applies to most services, including accommodation, food supplies, and laundry.
Reduced Rates & Exemptions:
- Hostels:
- 100% exemption for student-exclusive hostels offering accommodation and basic facilities.
- 5% tax for other hostels (includes all services).
- Restaurants:
- 8% tax for non-corporate local chains without Restaurant Invoice Management System (RIMS).
- 5% tax for non-corporate local chains with RIMS in operation.
- 1% tax for traditional “dhaba” and street-side restaurants with limited pre-cooked food and informal seating.
- Other Accommodation:
- 1% tax for basic overnight bed services like sarrayas or inns (maximum charge Rs. 300 per bed).
- Marriage Halls & Caterers:
- 8% tax for marriage halls with or without food services.
- 10% tax for standalone or integrated catering services.
Takeaway & Delivery:
- These services are included in the tax rates mentioned above, regardless of being offered independently or as part of other services.
Filing:
- KPRA requires monthly sales tax filings for all covered businesses.
Key Takeaways:
- Different tax rates apply based on your business type and location.
- Exemptions and reduced rates are available for specific categories.
- Regular tax filing is mandatory.
By understanding these regulations and utilizing available benefits, you can ensure smooth operations and tax compliance for your hospitality or food service business in Khyber Pakhtunkhwa.
