- Government plans to withdraw further sales tax in Budget 2025-26
- Aim is to encourage documentation across the supply chain
- Current further sales tax is four percent on unregistered transactions
- Removal may cause short-term revenue loss but expected long-term benefits
- Documentation drive to include manufacturers to retail outlets
- Importers face challenges with unregistered distribution
- Previous increase from three to four percent aimed to discourage unregistered transactions
- Section 3(1A) of Sales Tax Act penalized unregistered businesses
- Abolishing tax aims to make registration more attractive
- Pakistan has 40,000 to 60,000 active sales tax filers
- Reform expected to broaden registration and increase tax revenue over time
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.
