11/04/2023
Several taxes may apply to business transactions, depending on the nature of the transaction. As per law, taxes on income, whether personal or corporate, sales tax on goods, and customs duties fall under the federal government’s domain. The Federal Board of Revenue (FBR) is the tax collection body of the federal government. Whereas the provinces collect sales tax on services. The revenue collection bodies for sales tax on services are:
1. Punjab Revenue Authority
2. Sindh Revenue Board
3. Balochistan Revenue Authority
4. KPK Revenue Authority.
Sales tax on services in the Islamabad capital territory is collected by the FBR.
The main charges businesses are subject to are income tax and sales tax. The Income Tax Ordinance, 2001 governs the income tax in Pakistan. Whereas, Sales Tax Act, 1990 regulates sales tax on goods. Provincial tax laws govern sales tax on services.
The tax year in Pakistan starts from July 1st and ends at June 30th. Any year other than this is considered as special tax year. Which needs prior approval from FBR.
