Category Taxation in Pakistan

Pakistan Ordered to Drop Mobile Charge Taxes

June 12, 2018 Taxation in Pakistan

Mobile charge PakistanISLAMABAD – Mobile top-ups may go untaxed in Pakistan, if only temporarily.

On June 11th the Supreme Court of Pakistan ordered that all tax withheld from the sale of mobile phone recharge and top-up cards be stopped, at least temporarily.

The judges remarked that currently, the sale of mobile charge cards carries too heavy a tax burden, as approximately 42 percent of the value of a PKR 100 charge card actually ends up as taxes.

Approximately 19.5 percent of the total tax load is made up of Federal Excise Duties, another 12.5 percent goes towards Withholding Tax, and another 10 percent becomes service and maintenance charges.

The judges ordered that a new comprehensive taxation plan be devised for mobile charge cards, in lieu of the current system.

Phone companies and tax authorities hav...

Read More

Hike Cigarette Taxes, Says Pakistan Health Ministry

April 11, 2018 Taxation in Pakistan

cigarette taxesISLAMABAD – Cigarette taxes in Pakistan need to be raised, not lowered, says the national Ministry of Health Services.

The Ministry of National Health Services, Regulations and Coordination of Pakistan has called on the government to raise taxes on cigarettes sold in the country, as the move could boost tax revenues and have positive health effects for taxpayers.

The Ministry is calling for their previously proposed plan to be enacted, with a PKR 44 tax on each 20 pack of cigarettes sold.

The tax is forecast to result in a 13.2 percent drop in smoking rates in the country, a PKR 39.5 billion rise in tax revenues, and a 0.65 million drop in premature deaths in the country.

However, despite the Ministry’s recommendations, the government has implemented a PKR 16 per pack tax, which it claim...

Read More

Pakistan Reduces Tax and Offers Amensty

April 6, 2018 Taxation in Pakistan

pakistan tax amnestyISLAMABAD – Pakistan is trying to bring people into the tax net, however, it is simultaneously reducing tax rates, boosting tax-free thresholds, and offering a tax amnesty.

On April 5th the government of Pakistan announced a series of sweeping changes aimed at cutting down on tax evasion and boosting tax revenues in the country.

The three most popular points of the plan are the launch of an amnesty program, the overhaul of tax rates for individuals, and the announcement that individuals’ Computerized National Identity Card will now act as their National Tax Number.

The use of national IDs as the National Tax Number is expected to help bring more people into the tax net and ensure a wider range of compliance with filing and payment requirements.

The new amnesty will allow taxpayers wh...

Read More

Thousands of Companies Skipping Taxes in Pakistan

November 20, 2017 Taxation in Pakistan

Pakistan taxesISLAMABAD – While Pakistan’s biggest companies are paying a significant portion of all taxes, thousands of small companies are skipping all of their obligations.

According to information in Pakistan’s recently published Tax Directory 2016, approximately 40 percent of companies in Pakistan did not pay any taxes despite filing tax returns.

In total, 79 700 tax returns were filed by companies and partnerships, with 31 364 companies, and the remainder being made up by partnerships.

The Tax Directory shows that of the businesses that did file returns, approximately 33 000 did not pay any taxes at all.

However, it is noted that the non-payment is an indicator of poor compliance, as the tax rules in Pakistan state that businesses that make a loss must still pay a tax of 1 percent, if they se...

Read More

Panama Papers Scare Pakistan’s PMs into Compliance

July 28, 2017 Taxation in Pakistan

Pakistan taxISLAMABAD – MPs in Pakistan have started to report their full incomes and pay their full tax obligations, with some MPs reporting a 3 900 percent spike in payments.

Parliamentarians in Pakistan are owning up to the extent of their personal incomes and declaring levels which are closer to the truth in the new Parliamentarian Tax Directory released earlier this week.

The Parliamentarian Tax Directory is a recent initiative aimed at encouraging PMs to declare and pay their full tax obligations.

It is believed that the cause of the spike in tax payments is a combination of the efforts made by the government to encourage tax compliance and the after-effects of the infamous Panama Papers scandal.

It is thought the increasing likelihood of illicit tax behaviour coming to light has scared some p...

Read More