What You Need to Know About In-Active Sales Taxpayers in Pakistan

The Sales Tax Act, 1990 (STA) is a law that governs the levy and collection of sales tax in Pakistan. The STA defines an “in-active taxpayer” as a registered person who has not filed a sales tax return for six consecutive months.

There are a number of reasons why a taxpayer might become in-active. Some common reasons include:

  • has not filed tax returns for two consecutive months
  • is blacklisted
  • has not filed previous year income tax return
  • have not filed final tax return 115 or quarterly or annual withholding statements

Consequences of Being an In-Active Taxpayer

There are a number of consequences for being an in-active taxpayer. These consequences include:

  • The taxpayer may be subject to penalties, such as fines or interest.
  • The taxpayer may be barred from registering for sales tax in the future.
  • The taxpayer may be liable for sales tax on all of its sales, even if they are not reported.
  • The taxpayer may be subject to audit by the Federal Board of Revenue (FBR).

How to Avoid Becoming an In-Active Taxpayer

There are a number of things that taxpayers can do to avoid becoming in-active. These include:

  • Filing sales tax returns on time and accurately.
  • Keeping good records of all sales and purchases.
  • Paying sales tax liabilities promptly.
  • Registering for sales tax if the business meets the registration threshold.


Being an in-active taxpayer can have a number of negative consequences for businesses. By following the tips above, businesses can avoid becoming in-active taxpayers and protect themselves from the penalties and other consequences associated with this status.

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