Pakistani sales tax rates and sales tax compliance

Sales tax rates in Pakistan

The standard sales tax rate in Pakistan is 17%.

Exporters and certain providers of financial services may apply for a Sales Tax suspension. Imports of some basic foodstuffs and agricultural supplies are exempt from import Sales Tax.

Calculated at 20% of the sales tax withholding regime, there is an anti-fraud measure which may be applied for certain customers – generally public authorities paying their customers. The same is applicable for advertising services, including for non-resident suppliers. In these cases, the taxpayer must be a registered Withholding Agent.

The other current rates are:

Pakistan sales tax rates

Rate-Supplies

17%-Goods: supplies of goods, including imports. There is an additional 1% levied where the customer is a non-Sales Tax registered consumer.

16%, 15% and 13%-Services: banking; construction; shipping; telecoms (17%); advertising; specialist advice and consulting; outsourced businesses services; event organisation and related services; temp or contract employees; hotel and restaurants.

10%, 8%, 5%, 3%-Local imports and produce for export. Sugar. Certain plant and machinery.

18.5% to 25%-Various other specific supplies, including metals, chemicals and petroleum products

0%-Exports; office stationery 

Exempt-Pharmaceuticals; books and newspapers; agriculture produce; medical supplies

Pakistani sales tax compliance

Pakistani sales tax registered businesses must produce a tax invoice. Simplified invoices are permitted for retail sales. Invoices should include the following details:

• Name, address of the supplier

• Tax number of the supplier

• Name, address of the customer

• Date of supply

• Unique invoice number

• Description of the goods or services provided

• Sales tax rate, amount charged and gross amount of the invoice

• Foreign currency amount must be translated into PKR at a public exchange rate.