💰 Tax Law in Pakistan – Complete Guide
Tax law in Pakistan governs the collection of taxes by the federal and provincial governments to fund public services and development. It includes laws related to income tax, sales tax, customs duties, federal excise, property tax, and more.
⚖️ 1. Main Authorities Involved
| Authority | Jurisdiction |
|---|---|
| Federal Board of Revenue (FBR) | Central authority for federal taxes |
| Provincial Revenue Authorities | Sales tax on services & provincial taxes (e.g., PRA, SRB, KPKRA, BRA) |
| Local Governments | Property tax, professional tax, etc. |
📚 2. Main Tax Laws in Pakistan
| Law | Purpose |
|---|---|
| Income Tax Ordinance, 2001 | Federal income tax for individuals, AOPs, and companies |
| Sales Tax Act, 1990 | Federal sales tax on goods |
| Federal Excise Act, 2005 | Excise duty on certain goods and services |
| Customs Act, 1969 | Duties on import/export |
| Provincial Sales Tax Laws | Sales tax on services (e.g., Punjab Sales Tax on Services Act, 2012) |
| Finance Acts (Annual) | Introduce tax rates, exemptions, and new policies each year |
👥 3. Types of Taxes in Pakistan
🔹 A. Federal Taxes (collected by FBR)
Income Tax
On salaried individuals, businesses, and companies
Based on progressive slabs
Includes withholding taxes (WHT) on property, banking, etc.
Sales Tax on Goods
Standard rate: 18% (2024-2025)
Applies to most goods and imports
Federal Excise Duty (FED)
On specific items like tobacco, cement, beverages, etc.
Customs Duty
On imports and exports as per Customs Tariff
🔹 B. Provincial Taxes
Sales Tax on Services
Levied by provinces on services (e.g., restaurants, salons, telecom)
Rate varies between 13% to 16%
Property Tax
Annual tax on land and buildings
Professional Tax
Tax on businesses and professionals (e.g., lawyers, doctors)
Agricultural Income Tax
Levied on income from agriculture (varies by province)