- The Federal Board of Revenue (FBR) in Pakistan has announced the sales tax rates for the tax year 2024, effective from July 1, 2023.
- The sales tax will be charged at the rate of eighteen percent of the value of taxable supplies made by a registered person or on goods imported into Pakistan.
- An additional tax of four percent will be charged on taxable supplies made to an unregistered person or an inactive taxpayer, but the Federal government can exempt certain supplies from this additional tax.
- The Act introduces specific provisions for goods specified in the Tenth Schedule, with tax levied based on production capacity or on a fixed basis, with different rates for different regions or areas.
- The Act also addresses the taxation of goods specified in the Third and Eighth Schedules, with rates determined by retail prices and conditions specified in the Schedules.
- The liability to pay the sales tax rests with the person making the supply or importing the goods, but the FBR can specify certain goods where the liability shifts to the person receiving the supply.
- The Act outlines the tax rates and procedures for goods specified in the Ninth Schedule, allowing the Federal Government to levy and collect additional tax at rates not exceeding eighteen percent of the value of goods or class of goods.
- The Act introduces provisions related to withholding tax, with online marketplaces designated as withholding agents for tax on taxable supplies.
- The Gas Transmission and Distribution Company is mandated to charge sales tax at the rate of eighteen percent of the value of supply to CNG consumers.
- The Act introduces specific provisions for Tier-1 retailers, emphasizing the integration of retail outlets with the FBR’s computerized system for real-time reporting of sales.
- The Federal Government reserves the right to levy and collect additional amounts of tax from retailers, excluding Tier-1, through their monthly electricity bills.
- The new tax rates underline the government’s commitment to refining the taxation system, promoting transparency, and ensuring a fair and efficient revenue collection mechanism.
Source: pkrevenue.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
