TEAM MEMBERS

161-116-115 – ROKAIYA SULTANA SUMA

161-116-134 – SUMI AKTHER
161-116-135 – MD. ABID HOSSAIN
161-116-155 – MD. MAHBUB HUSSAIN
THE UNICORNS
PAKISTAN

Official name : The Islamic Republic of Pakistan

Currency : Pakistani Rupee (PKR)
Population : 212 million (5th largest)
Average tax payer: 0.57% of the population
or
1.2 million of the population
Economic Condition
▸ World ranking: 23rd in terms of PPP
▸ World ranking: 38rd in terms of GDP

4
“ Taxation is the price which civilized communities
“
pay for the opportunity of remaining civilized.
- Albert Bushnell Hart
 TAX HISTORY OF PAKISTAN

Income Tax Act of 1922 Income Tax Ordinance 1979

1 2
The Income Tax Act of 1929 The Income Tax Ordinance
was prevalent during the was the first law on Income
British Raj and was inherited Tax which was publicized
by both the governments of
in Pakistan from 1 July 1979
India and Pakistan upon
independence and partition in
by the Government of
1947. This act initially formed Pakistan.
the basis of both country's
Income Tax codes.

6
 TAX HISTORY OF PAKISTAN

Income Tax Ordinance 2001 Income Tax Rules 2002

3 4
To update the tax laws and
bring the country's tax laws
into line with international
standards, the Income Tax
Ordinance 2001 was
promulgated on 13
September 2001. It became
effective from 1 July 2002.
IT (Income Tax) rules
2002 were promulgated
by the Federal Board of
Revenue (FBR) on 1 July
2002 in exercise its
powers granted under
section 237 of the
Ordinance.
7
TAXATION AUTHORITY OF PAKISTAN

Tax administration : Federal Board of Revenue (FBR)

Former name : Central Board of Revenue (CBR)
Regional tax office : In 21 regions
Taxation system : Complex
Tax : More than 70 unique taxes
Administered by : At least 37 agencies
Tax collection cost : Less than 1%
Fiscal year : July 1 – June 30

8
 TAXATION IN PAKISTAN

Income tax Federal excise

INCIDENCE OF TAX

Workers welfare
tax Custom duties

Direct Tax Indirect Tax

Capital value
tax Sales tax

Workers profits
participation fund Others

9
TAXATION IN PAKISTAN
Salaries;

Interest on securities;

Income Tax Income from property;

Income from business

or professions;

Capital gains;

Income from other

sources
10
 Individual Tax Rate
PAKISTAN BANGLADESH
Chargeable
Annual Taxable Tax Rate(%)
Tax Rate (%) Income
income
(BDT)
Below Rs.1,200,000 0% Up to Tk 250,000 0%

Rs.1,200,000 - 5% of the amount exceeding Next Tk 4,00,000 10%

Rs.2,400,000 Rs.1,200,000

Rs.2,400,000 - Rs.60,000 + 10% of the amount Next Tk 5,00,000 15%

Rs.4,800,000 exceeding Rs.2,400,000

Rs.180,000 + 15% of the amount Next Tk 6,00,000 20%

More than Rs.4,800,000
exceeding Rs.4,800,000

Next Tk 30,00,000 25%

Rest Amount 30%

* Effective from 1st July 2018 12
Allowable Deductions and Tax Credits
Deductions and tax benefits are available for non-salaried class, but not
for the salaried class. Such deductions include:

- Donations to charitable organizations up to a certain limit;

- Individual fixed deductions:
• PKR 50,000 for single employees,
• PKR 60,000 for wage-earning women and
• PKR 40,000 for the others;

- 50% of special deduction for people above 65 years old, with an

annual income which does not exceed PKR 200,000.

There are other tax deduction allowances according to the status of

each.
13
Corporate Tax Rate
Current: 31% and +5% for banking industry

Corporate Tax Rate for Previous 5 Years

Year

34%

33%

32%

31% 31%

2014 2015 2016 2017 2018

14
Corporate Tax Rate

Corporate Tax Rate for Next 5 Years

Tax Year Rate Year
2019 29%

2020 28% 29%

28%
2021 27%
27%
2022 26% 26%
25%
2023 and onwards 25%

2019 2020 2021 2022 2023

15
General Sales Tax (GST)
Genera Sales Tax rate : 17%
Services Tax : 14%-16%
VAT Rate (General) : 17%
VAT Rate (Others) : 0% - 24% (varies)

Sales Tax Rate for Previous 5 Years

Year

17% 17% 17% 17% 17%

2014 2015 2016 2017 2018 16

TAX COLLECTION

17
85%

18
“ “
The hardest thing in the world to understand is the
income tax.

- Albert Einstein

19
THANK YOU
20