Understanding Pakistan’s Provincial Sales Tax Rates

In Pakistan, understanding the sales tax system is crucial for businesses operating within the country. This article breaks down the different types of sales taxes, who collects them, and where to register for compliance.

Types of Sales Taxes:

  • Sales Tax on Goods (SST): Applicable to most physically traded goods within Pakistan, collected by the Federal Board of Revenue (FBR).
  • Sales Tax on Services: Varies by province, with each province having its own authority and tax rate. Some key authorities include:
    • Punjab Revenue Authority (PRA) – 16%
    • Sindh Revenue Board (SRB) – 13%
    • Khyber Pakhtunkhwa Revenue Authority (KPRA) – 15%
    • Balochistan Revenue Authority (BRA) – 14%
  • Islamabad Capital Territory (ICT) Tax: Applies to services within Islamabad, currently at 15%.

Who Collects the Tax:

  • FBR: Collects SST and ICT tax.
  • Provincial Revenue Authorities: Collect sales tax on services within their respective provinces.

Registration Requirements:

  • If you supply goods within Pakistan, register with the FBR under GST (General Sales Tax).
  • If you provide services within a specific province, register with the relevant provincial authority (PRA, SRB, KPRA, or BRA).
  • For services within Islamabad, register with the Islamabad Capital Territory Administration.

Resources and Compliance:

  • Each authority has its own portal for registration, filing returns, and accessing information.
  • Timely filing of returns and tax payments are crucial for compliance.

Key Takeaways:

  • Understanding the type of sales tax applicable to your business and the relevant authority is essential.
  • Separate registration with the FBR and/or provincial authorities may be required.
  • Staying informed about updates and utilizing online resources can ensure smooth compliance.

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