TAX AWARENESS

SESSION
BY TAX DEPARTMENT
TAXATION:

• Tax is an obligatory financial levy levied by government or individual & business identities in under
to support govt spending.
• Taxation is a system for the collection of taxes by government & redistribution of income among its
citizens.

BENEFITS OF TAXATION:

• Your contribution to the prosperity of the nation

• Enhanced quality of life.
• Create more equitable & well being of society.
• To support public services
• Development of infrastructure
• State running smoothly
OUTLINE:

o Types of Taxes
o Law Enforcement agencies
o Sales Tax on Goods
o Sales Tax on Services
o Sales tax Withholding
o Sales Tax Rates
o Further Tax
o Deduction of Advance Income Tax
o Rates of Advance Income Tax withholding
o Companies registered with law enforcement agencies
o PSID & CPR
o HS Code
Types of taxation

DIRECT TAXES INDIRECT TAXES

Taxes that are levied on income of individuals Taxes that are levied on goods & services
& corporations directly with declared rate by indirectly and ultimate paid by end consumers.
govt of the Pakistan. Categories:

Categories: 1. Sales Tax (Goods & Services)

1. Withholding Tax (Liability) 2. Federal Excise Duty (Import)

2. Advance Income Tax (Tax deducted at 3. Custom Duty (Import)

Source) 4. Value added Taxes/ Additional tax

Focused…
In this session we focused on both types of taxes but covered the main & relevant portion

Indirect Tax Direct Tax

Sales Tax Advance

Income Tax

Sales Tax on Sales Tax on

Goods Services
LAW ENFORCEMENT AGENCIES:
Agencies & tax regulatory authorities that are investigate tax crime, money laundering and detect
suspicious wealth sources in tax regulations. Since 1947 to 2010 FBR collect & dealt all tax matters
but after 18th amendment tax supremacy of investigation regarding services transfer to all Provinces.
So, Now FBR collect and investigate all direct taxes and indirect tax that is imposed on goods only:

Federal or Central board authority:

1. Federal board of Revenue (FBR)

Provincial authorities:
2. Punjab Revenue authority (PRA)
3. Khyber Pakhtunkhwa Revenue Authority (KPRA)
4. Sindh Board of Revenue (SRB)
5. Baluchistan Revenue Authority (BRA)
6. Azad Jammu Kashmir Revenue Board (AJKRB)
7. Gilgit Baltistan Revenue Authority (GBRA)
TAX PERIOD/ YEAR:
Tax Period means the calendar year on the basis of which a taxpayer is required to pay the tax to the
tax authority. A tax year is a period of twelve months starting from 1 st July and ending on 30th June
in the same year by default but the tax year will be deviate according to the nature of business.
Like, Govt institutions & Non-profit organizations have tax period that is started from 1 st Jan &
ends on 31st Dec on each year.

NATIONAL TAX NUMBER:

NTN is a unique ID issued by Federal Board of Revenue (FBR), the tax regulatory
authority in Pakistan, to verify the registration of business.
Seven digit: 2793009-2
SALES TAX REGISTERATION NUMBER:
The registration with FBR provides you with a Sales Tax Registration Number (STRN)
or User ID and password. These credentials allow access to efile portal, the online portal for filing
Sales Tax Return. Online Sales Tax Return can only be filed while logging into efile portal.
Thirteen digit: 09-04-9999-022-55
 Filer & Non-Filer

Non-filer:
Filer: A person who dose not file Income tax
A person who file Income tax return to
return to tax authority (FBR) after the due
tax authority (FBR) with in tax period.
date or the tax period

Residence & Non-Residence

Residence: Non-residence:
A person who live in Pakistan
A person who have stay in Pakistan 182 or
aggregated period of 183 days in a tax
less in Pakistan with in a tax year.
year.

Registered & Un-Registered

Registered:
A person who have Sales Tax Registered
Number or NTN. A person have both
numbers he/she is registered in both
Income & Sales.
Un-registered:
A person who dose not have STRN and NTN.
But if he have just NTN he is registered in
Income tax but not in sales tax
FEDERAL BOARD OF REVENUE (FBR)
(Sales Tax Act, 1990)
Federal Governance authority of Pakistan that investigate tax crimes and collect taxes (revenue) that are
levied on Goods (either commercial Items, Import or Export) and services on federal basis.

Tax rate:
Tax imposed on Goods or physical items sell & purchase in all over the Pakistan (commercially) with
general sales tax 18% rate. This rate applied on all physical items except 3rd 8th & 9th schedule items (Sales Tax Act
1990).
3rd schedule: Grocery, bakery, 8th second hand and natural gas. 9th SIM card & mobile phone accessories
Normally we used the word General Sales Tax (GST) for tax on goods but internationally this word used as a Value
Added Tax (VAT).
Invoice Name: GST Invoice

FURTHER TAX:
A person or corporate who have no STRN but purchased taxable items, further general sales tax is applied
with 4% rate u/s 3 (1A) sales tax Act 1990, but If an organization is unregistered but they have FTN then further tax
will not applied.
GST applicable on 3rd schedule items but further tax will not applied because these are price uncontrollable items and
price print on it. It is also known as Minimum retail price (MRP).
PUNJAB REVENUE AUTHORITY (PRA)
(Sales Tax Act, 2012)

Punjab revenue authority that investigate tax crimes and collect taxes (revenue) levied on services
provided in Punjab Province.

Tax rate:
There are 3 different categories of PST rates:

Standard Rate Reduced Rate High Rate

(16%) (5%) (19.5%)
• Cargo • IT Companies • Telecommunic
• TCS ation Co.
• Daewoo
• Others

Invoice Name: PST Invoice

KHYBER-PAKHTUNKHWA REVENUE AUTHORITY (KPRA)

(KP finance Act,

2013)
KPRA investigate tax crimes and collect taxes (revenue) that are levied on Services provided in
Khyber-Pakhtunkhwa province.

Tax rate:
Sales tax on KPST is 15% of gross amount.
Invoice Name: KPST Invoice

SINDH BOARD OF REVENUE (SRB)

(SRB Act, 2011)
SRB investigate tax crimes and collect taxes (revenue) that are levied on Services provided in Sindh
province.

Tax rate:
Sales tax on KPST is 13% of gross amount.
Invoice Name: SST Invoice
SALES TAX WITHHOLDING:
Withheld means tax deducted at source. Buyer deduct an amount that are defined by tax
authorities at the time of payment and pay themselves to concerned authority on behalf of their vendor.
This amount treated as liability for Buyer & Advance tax payable for supplier. (Refundable).
A person who registered as a withholder with tax authorities known as withholding agent and
then they are liable and responsible to withheld sales tax.

Sales tax withholding rate defined under sales Tax Act 1990 & Finance Act 2023

Sales tax withheld on GST:

Withholding Agent deduct 1/5 (20%) of sales tax amount.

Sales tax withheld on PST, KPST, SST, BST:

Withholding Agent deduct 100% of sales tax amount & paid to the tax revenue authority and
the remaining payment send to their supplier.
INCOME TAX WITHHELD:
Income tax withholding rate defined under second schedule of Income tax ordinance 2001 &
Finance Act 2023 with different sections mentioned below:

Section Description Section Description

148 Import 155 Prizes & Winning & Sale of Petroleum Items
149 Salaries 156 Advance tax on cash withdrawal
150 Dividend 231 Brokerage & Commission
151 Profit on debt 233 tax on motor vehicles
152 payment to Non-resident Persons 234 Electricity Consumption
153 Payment of Goods & services and Contract 235 Telephone & Internet respectively
154 Exports Goods & Services 236
Advance Income tax withheld on Goods & services under Section 153:
Income Tax Ordinance 2001 & Finance Act 2023 defined section 153 under clause a, b & c and subsection 1 and 2
respectively . This section related to tax deducted at source on the payment of Goods of services (Federal &
Provincial).
 Section,
Sub-section Description Rate %
& Clause
153 (1) (a) Any other Goods 5%
153 (1) (b) On services: freight Forwarding, Air cargo, Courier, hotel, security guard, software 4%
development, Engineering, Car Rental, Building maintenance, Inspection, Certification,
Testing & Training
Other services:
Company 9%
Other than Company 11%
Advertising services 1.5%
153(1) (c) Execution of Contract:
Sports Person 10%
Companies 7.5%
Other than Company 8%
153 (2) Export house on payment of stitching, dying & printing services 1%
153B Payment of royalty to resident person 15%
Companies Registered with law enforcement agencies:

AYK (Pvt). Limited PMS (Pvt). Limited GES (Pvt). Limited

FBR FBR FBR
PRA PRA PRA
KPRA
SRB
Payment Slip ID (PSID)
Payment Slip Identity is the slip that is automatically generated by tax authority when we
generate challan against any tax payable.

Computerized Payment receipt (CPR)

Computerized payment receipt is the receipt that is generated when we pay challan amount to
concerned authority. This is basically the payment confirmation receipt
 HS Code/ PCT code
Stands for Harmonized System Code and Pakistan Custom Tarif. HS code basically an
identification codes that are assigned to the goods for use in international trade. These codes administered
by World Customs Organization (WCO) and internationally accepted for use by custom authorities to
identify goods.
4 digit code that describes the what product is this?

Example:
First 2 digit Chapter
Second 2 digit Heading
Last 2 digit Subheading

7413
74 Chapter Copper & Articles
13 Heading Standard Wire, cables, plated bands and the like of copper, not electrically insulated
Question/Answer Session
Quiz