Punjab Revenue Authority (PRA) Sales Tax Rates

The Punjab Revenue Authority (PRA) has announced that all withholding agents in Punjab, Pakistan, are now considered “collecting agents” for sales tax purposes. This means they are responsible for collecting sales tax on behalf of the government and depositing it into the government treasury.

This change is based on the Punjab Sales Tax on Services Act, 2012. It aims to strengthen tax collection efforts and ensure that the government receives the appropriate amount of sales tax revenue.

Key Points:

Withholding Agents as Collecting Agents: All entities acting as withholding agents in Punjab are now required to collect sales tax and remit it to the government.
Government Treasury Deposit: The collected tax must be deposited into the government treasury.
Legal Basis: The change is implemented under the Punjab Sales Tax on Services Act, 2012.

This notification has significant implications for businesses and individuals involved in transactions within Punjab. It’s important to understand the new responsibilities and ensure compliance with the requirements of the Punjab Sales Tax on Services Act, 2012.

Tax Rates of Various Services in Punjab:

Advertisement Services: All advertisement services on television, radio, and other media will be taxed at a rate of 16%.
Franchise Services: Tax rates for franchise services vary based on the nature of the services:
- Zero percent without input tax adjustment for services related to information technology educational institutions.
- Five percent without input tax adjustment for services related to other educational institutions.
- 16 percent for all other franchise services.
Consulting Services: Tax rates for consulting services also vary:
- Zero percent without input tax adjustment for training services related to information technology.
- 16 percent for all other consulting services, including human resource, exhibition, event management, valuation, and marketing services.
Other Services: Other affected services include advertising agents, brokerage services, healthcare and recreation services, debt collection services, and parking services. Tax rates for these services range from 5% to 16%.

Conclusion:

The notification outlines the procedures for payment, assessment, and recovery of taxes. The PRA will communicate any changes or amendments to the affected services to the collecting agents.