Pakistani sales tax rates and sales tax compliance

Updated on July 18, 2022

Sales tax rates in Pakistan

A 17 percent flat tax is the norm in Pakistan’s retail sector.

Exporters and some financial service providers can request a suspension of the Sales Tax.

Export Sales Tax does not apply to a few fundamental foodstuffs and agricultural supplies imported into the United States.

Certain clients, usually governmental authorities paying their customers, may be subject to an anti-fraud measure calculated at 20% of the sales tax withholding regime. Advertising services, including those provided by non-resident vendors, are subject to the same rules. The taxpayer is required to be a Withholding Agent in these situations.

The following rates are also valid at the time of writing:

Pakistan’s tax rates for sales

Rate

Supplies

One-seventh of the economy is made up of goods, which includes imports.

Customers who are not registered for sales tax will be charged an extra 1%.

15%, 15% and 13% of the population

Banks; construction; shipping; telecoms; advertising; specialized advice; outsourced businesses services; event organization and related services; temp or contract personnel; hotels; restaurants are among the services provided by these companies.

10, 8, 5, 3, 3%: Imports from inside the region or local products intended for export. Sugar. Some of the equipment.

A range of 18 to 25%

Other resources, such as metals, chemicals, and petroleum products, are also available.

Exports were zero percent; office supplies were zero percent.

Pharmaceuticals, books and newspapers, agricultural produce, and medical supplies are all exempt from taxation.

Compliance with Pakistani sales tax

Tax invoices are required by Pakistani firms who are registered for sales tax. Retail sales are permitted to use simplified invoices. The following information must be included on all invoices:

The vendor’s name and location information

Supplier’s tax identification number

The customer’s name and address

Supply date

One-of-a-kind bill identifier

Provider’s description of their products or services

The tax rate, the amount charged, and the invoice’s total gross revenue

A public exchange rate must be used to convert the foreign cash into Pakistani rupees.

Pakistan has a strict supply-time policy.

At the time of delivery, sales tax is payable. The earlier of when the taxable supply is supplied or payment is made in the case of services. For most commodities, this is when the invoice is paid in full.

Import duties are collected at the point of entry into Pakistani customs.