Taxation

Taxation is a problem area for the government, as Pakistan has a very narrow and small tax base. The Federal Board of Revenue, under the control of the Ministry of Finance is attempting to alter this situation, but is having limited success.

General tax information:

  • Customs duties are up to 25 per cent (four rates 25, 20, 10 and five per cent) with the exception of vehicles (duty can be as high as 200 per cent).
  • Specific duties are generally assessed on the net weight of goods.
  • Sales tax of 16 per cent is levied on most goods.
  • Pulses and chick peas are duty free, soya beans (1201.000), rape or colza (1205.1000 and 1205.9000), sunflower (1206.0000) and safflower seeds (1207.6000) whether or not broken have a custom duty of 10 per cent.
  • The duty on raw materials is 10 per cent, for semi-processed 15 to 25 per cent and for finished goods that are also manufactured locally the duty is 35 per cent.
  • Excise is levied on a wide range of goods.

Exemptions are available in certain industries and areas.