WHAT ARE THE RATES OF SALES TAX - VAT - OTHER TAXES IN PAKISTAN

Sales Tax  OR Value-Added Tax (VAT) 

In Pakistan, Value-Added Tax (VAT), termed as a "Sales Tax," is generally levied at seventeen percent (17%) on the value of goods, unless particularly exempt or subject to sales tax at a reduced rate, after allowing related input credits.

Sales Tax On Services

Sales Tax on services is levied at rates ranging from thirteen percent (13%) to sixteen percent (16%) by all four (4) provinces, Territory Capital Islamabad, Punjab, Gilgit-Baltistan, Sindh, Azad Jammu, and Kashmir.

 

Value Addition Tax

Commercial import of goods is subject to value-added tax at three percent (3%), and at the import stage, the sales tax is payable at the standard rate.

 

Sales Tax On Export-Oriented Sectors

Local supplies are made by persons operating in the 5 export-oriented sectors (textile, leather, footwear, surgical goods, sports goods) are subject to sales tax at an applicable rate of seventeen percent (17%), with a reduced rate facility available in some instances.

 

Customs And Import Duties

Customs and other duties are collected at the import stage at varying rates classified under the Harmonized System (HS) Code.

 

Federal Excise Duty

Federal excise duty (FED) is leviable on definite import of goods, manufacturing types, and rendering of services at deviating rates. Sales tax on services, a substitute for Federal excise duty (FED), under the constitution. It is to be collected and levied by the provinces on services rendered within their jurisdictions.

 

Property Taxes

Property owners must pay property tax collected and levied by provincial governments by municipal governments at deviating rates.

 

Stamp Duty

In the case of the transfer or sale of immovable property, stamp duty is payable (with varying rates based on the property's location in that area) on the property's value.

 

Payroll Taxes

Other than social security contributions, employers are not responsible for paying any additional tax on their employees or salaries.

 

Social Security Contributions

Nominal social security and Employees Old-Age Benefits contributions are collected from the employers and the employees. Employers are responsible for collecting and paying every month.