The Sales Tax Chaos in Pakistan

01:28 PM | 17 Aug, 2016
The Sales Tax Chaos in Pakistan
In the beginning there was only FBR, responsible for collection of Sales Tax on Services. Then came in the famous 18th amendment which shifted the assessment & collection of Sales Tax from Center to provinces. As a result each province formed its own Revenue Agencies and we now have SRB, PRA, KPRA & BRA to deal with.

Sindh was the first to introduce a comprehensive Sales Tax on Services Act in 2011 followed by Punjab, KPK and Baluchistan. Like most of the other acts of Government in Pakistan this again is a half cooked dish which is proving to be a recipe of death for the service sector specially the small and medium sized companies.

Following are the structural flaws in this system of tax collection:

Confusion All Over

These agencies have passed contradictory laws creating severe issues for the Service Providers and the Payers. As a result multiple agencies fight over the same piece of Tax Revenue in cases where Service Provider is based in one province and the Payer to which Service is provided is located in another. There are companies in Sindh (duly registered with SRB and no office outside Sindh) that are notified by PRA, KPRA & BRA for registration with them.

Where to get the Adjustment From

Though they have signed MOUs and have issued several circulars/notifications, the mechanism for cross adjustments of taxes between different tax agencies (in provinces and center) is not yet implemented. This is the root cause for most of the issues businesses are facing with respect to Sales Tax on services.

Withholding of Tax

This entire system of collection is based on withholding of tax by the Payer. At times taxes are withheld but not deposited by the Payer. Then there are instances where taxes are withheld and deposited with another agency (specially in cross-border rendering of services). Also there are cases where taxes are deposited in wrong names but there is no relief for the Service Provider by the agencies.

Double Taxation

Agency businesses under this regime have further complexities to face. Agents such as Advertising Agents have to charge Sales Tax over and above the invoices of the Vendors where the tax is not charged. This tax is withheld by the Payer at the time of payment to the Agent however when the payment is made by the Agent to the Vendor tax is again to be withheld. This becomes almost impossible in case of foreign vendors and the only way out of this situation is to charge double tax.

Filing of Returns

At the time of filing of returns the Service Provider can never be sure of the amount of tax that will be withheld by the Payer. Dependency for this information is always on the Payer and Service Providers have to run after the Payers for months and months to get hold of the challans. It would have been great if Service Provider can online verify if the tax withheld is duly deposited by the Payer or not BUT then it will be facilitation for the Tax Payers and how the hell can Government want that!

Cost Burden

The withholding tax regime has put enormous financial pressure on both the Service Providers and Payers as both have to setup departments to deal with Sales Tax matters. In addition to this Tax consultants are to be hired to deal with these haunting agencies.


Government of Pakistan should immediately intervene to fix this terrible situation as if status quo is maintained here as this is very rapidly killing the small and medium sized service sector businesses, a sector that is a major contributor towards creating employment in the country!


Pakistani rupee registers marginal gain against US Dollar, Euro, Pound, Riyal and Dirham; Check forex rates

Pakistani rupee continued its momentum against the US dollar, and orther currencies in the open market on Thursday, as the local currency also improved in the inter-bank market.

Dollar Rate in Pakistan Today

On Thursday, the US dollar moved down and was being quoted at 283.2 for buying and 286.15 for selling.

Euro comes down to 308 for buying and 311 for selling. British Pound rate dropped to 358.5 for buying, and 362 for selling.

UAE Dirham AED witnessed slight drop and new rate stands at 77.4 whereas the Saudi Riyal remained stable at 76.

Today's currency exchange rates in Pakistan - 7 December 2023

Source: Forex Association of Pakistan. (last update 09:00 AM)

Currency Symbol Buying Selling
US Dollar USD 283.2 286.15
Euro EUR 308 311
UK Pound Sterling GBP 358.5 362
U.A.E Dirham AED 77.4 78.1
Saudi Riyal SAR 76 76.8
Australian Dollar AUD 187.2 189
Bahrain Dinar BHD 757.23 765.23
Canadian Dollar CAD 209 211
China Yuan CNY 39.89 40.29
Danish Krone DKK 41.19 41.59
Hong Kong Dollar HKD 36.41 36.76
Indian Rupee INR 3.42 3.53
Japanese Yen JPY 1.39 1.45
Kuwaiti Dinar KWD 921.71 930.71
Malaysian Ringgit MYR 61.02 61.62
New Zealand Dollar NZD 174.54 176.54
Norwegians Krone NOK 26.05 26.35
Omani Riyal OMR 739.62 747.62
Qatari Riyal QAR 78.22 78.92
Singapore Dollar SGD 211 213
Swedish Korona SEK 27.12 27.42
Swiss Franc CHF 324.94 327.44
Thai Bhat THB 8.06 8.21

Gold prices in Pakistan move down despite positive global cues; Check latest rates here

Gold price in Pakistan remained under pressure as the yellow metal moved down despite an upward trend in the international market.

Gold Rates in Pakistan Today - 7 December 2023

On Thursday, the price of a single tola of 24-karat gold stands at Rs217,100 and 10 grams of 24k gold costs Rs186,130. 

Single tola of 22 Karat Gold costs Rs199,000, 21 karat rate for per tola is Rs189,960 and 18k gold rate is Rs162,825.00 for each tola.

In the global market, gold prices hover at around $2026, gaining $8.30 on Thursday.

Today Gold Rate in Pakistan

Today Gold Price in Pakistan (4 September 2023)

City Gold Silver
Lahore PKR 217,100 PKR 2,565
Karachi PKR 217,100 PKR 2,565
Islamabad PKR 217,100 PKR 2,565
Peshawar PKR 217,100 PKR 2,565
Quetta PKR 217,100 PKR 2,565
Sialkot PKR 217,100 PKR 2,565
Attock PKR 217,100 PKR 2,565
Gujranwala PKR 217,100 PKR 2,565
Jehlum PKR 217,100 PKR 2,565
Multan PKR 217,100 PKR 2,565
Bahawalpur PKR 217,100 PKR 2,565
Gujrat PKR 217,100 PKR 2,565
Nawabshah PKR 217,100 PKR 2,565
Chakwal PKR 217,100 PKR 2,565
Hyderabad PKR 217,100 PKR 2,565
Nowshehra PKR 217,100 PKR 2,565
Sargodha PKR 217,100 PKR 2,565
Faisalabad PKR 217,100 PKR 2,565
Mirpur PKR 217,100 PKR 2,565


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