Sun. Mar 31st, 2019

Online Pakistani Business Returning Tax Files is Good not Bad

Recently FBR has announced reduced rates for selling through e-commerce site. If you have got yourself registered as an active tax payer then whatever transaction you do with your online Pakistani Business Bank Account you are paying tax in eyes of SECP and has to be accounted for with Federal Board of Revenue and Provincial Revenue Authority.

What is the online sales tax in Pakistan?

Sales tax as per taxation law in Pakistan is applicable in general, whether its online or not. local e-commerce businesses are supposed to charge GST on every order but they are not. Break even, loss or profit. It has to be accounted for. Luckily, if you’re doing online business then you are exempted and in your tax return you have to add that income under exemption head. In any case if you’re doing online or offline business, you have to file your income tax return.

Sales Tax and Income Tax can’t be considered same keeping in mind the Pakistani taxation laws. Some important numbers (considerably proposed to change):

International Transactions Online Taxation Charges charged by banks

  • 1% for filers
  • 3% for non filers

Local Transactions Online Taxation Charges charged by banks

  • 0% for filers
  • 0.6% for non filers on above 50k transactions

Related: 20 Major Business Problems Faced by Pakistani Startups in 2019

So it’s better until you are not dealing with corporate clients, you keep your sales on cash payment mode. This does not mean Cash on Delivery. This eviction is disliked since the culture of keeping cash unaccounted becomes common with your customers. This prevents Government of its due right of tax collection. Despite, if that cash has been withdrawn from some bank, the bank cuts the tax at source depending on the filler status.

STN is for sales and NTN is for withholding income tax which is 4.5% of sales. Sales tax on sales made through online channels is not exempted but Income tax is. Basically, if you are working in Pakistan then you have to pay two taxes for sales i.e., sales (17%) and income (4.5%). And if you are providing services then you have to pay GST on service Punjab Sales Tax i.e 16% collected by PRA (Punjab Revenue Authority)  if you’re from Punjab and Income tax on services i.e. 10% collected by FBR. Also, if we have some purchase with services then 17% GST. Which for some specific products is 19% called advanced GST.

FBR Crackdown: Pakistan Commoners Never Going to File Tax Returns Again

Get professional help! from a proper Taxation Lawyer: Mr. Aamir Umair or dial office line 04237354772. Take reference: Zorays Solar Business Pakistan.

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