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16JAN
TaxesinPakistan
PostedJanuary16,2010bybasilisktinEconomicDevelopment.14Comments
(hps://pakistaneconomy.les.wordpress.com/2010/01/2201024589_3f9b2894d41.jpg) Governmentearns
revenuethroughplentyofwayslikeinterests,dividends,tradingprotsetcandtaxisoneofthe
primarytoolofrevenueinabovementionedways.Someonerightlydescribestaxas;
Aneisataxfordoingsomethingwrongwhilsttaxisanefordoingsomethingright.
Pakistan,thestateof180,800,000peoplecollectedthetotaltaxrevenueofRs1,317,857millionsaccording
toBudgetestimate(B.E)200809whichislessthansatisfactoryandwitnessedactualslowinrealterm.I
willbeginmywritingwithOgdenNashsstanza
Themoreyouearn,thelessyoukeep,
AndnowIlaymedowntosleep.
IpraytheLordmysoultotake,
IfthetaxcollectorhasntgotitbeforeIwake.
ThesourcesoftaxrevenueinPakistanare:
FederalTaxes
ProvincialTaxes
1.FederalTaxes
(hps://pakistaneconomy.les.wordpress.com/2010/01/55.jpg)
LetstakeadetailedviewofdirectandindirecttaxesofPakistan.
IncomeTax
Itiskindofdirecttaxthatislivedonapersonhavingincomemorethanthecertainlevel.Accordingto
Plato:
Whenthereisanincometax,thejustmanwillpaymoreandtheunjustlessonthesameamountof
income.
(hps://pakistaneconomy.les.wordpress.com/2010/01/54.jpg)
TherevisedslabsfortaxableincomethroughFinanceAct2008aregivenbelow;
S.
No.
Taxableincome
Rateoftax.
(1)
(2)
(3)
1.
Wheretaxableincome
doesnotexceed
Rs.180,000Forwomen
taxpayeritisRs.240,000.
0%
2.
Wherethetaxable
income
exceedsRs.180,000but
doesnotexceed
0.50%
Rs.250,000
3.
Wherethetaxable
income
exceedsRs.250,000but
doesnotexceed
0.75%
Rs.350,000
4.
Wherethetaxable
income
exceedsRs.350,000but
doesnotexceed
Rs.400,000
1.50%
Rs.400,000
5.
Wherethetaxable
income
exceedsRs.400,000but
doesnotexceed
2.50%
Rs.450,000
6.
Wherethetaxable
income
exceedsRs.450,000but
doesnotexceed
3.50%
Rs.550,000
7.
Wherethetaxable
income
exceedsRs.550,000but
doesnotexceed
4.50%
Rs.650,000
8.
Wherethetaxable
income
exceedsRs.650,000but
doesnotexceed
6.00%
Rs.750,000,
9.
Wherethetaxable
income
exceedsRs.750,000but
doesnotexceed
7.50%
Rs.900,000,
10.
Wherethetaxable
income
exceedsRs.900,000but
doesnotexceed
9.00%
Rs.10,50,000,
11.
Wherethetaxable
incomeexceeds
10.00%
Rs.10,50,000butdoes
notexceed
Rs.12,00,000,
12.
Wherethetaxable
income
exceedsRs.12,00,000but
doesnotexceed
11.00%
Rs.1450,000,
13.
Wherethetaxable
income
exceedsRs.1,450,000but
doesnotexceed
12.50%
doesnotexceed
Rs.1,700,000,
14.
Wherethetaxable
incomeexceeds
Rs.1,700,000butdoes
notexceed
14.00%
Rs.1,950,000,
15.
Wherethetaxable
incomeexceeds
Rs.1,950,000butdoes
notexceed
15.00%
Rs.2,250,000,
16.
Wherethetaxable
incomeexceeds
Rs.2,250,000butdoes
notexceed
16.00%
Rs.2,850,000,
17.
Wherethetaxable
incomeexceeds
Rs.2,850,000butdoes
notexceed
17.50%
Rs.3,550,000,
18.
Wherethetaxable
incomeexceeds
Rs.3,550,000butdoes
notexceed
18.50%
Rs.4,550,000,
19.
Wherethetaxable
incomeexceeds
Rs.4,550,000butdoes
notexceed
19.00%
Rs.8,650,000,
20.
Wherethetaxable
incomeexceeds
Rs.8,650,000
20.00%
WorkersWelfareTax
Itischargedat2%onthemanufacturershavingincomeofRs100,000andabove.EmployeesOldAge
BenetSchemeisnancedthroughthisfund.
CapitalValueTax
CapitalValueTaxispayablebyeveryindividual,associationofpersons,rmandcompany,notbornon
theNationalTaxRegister.CurrentlyCVTispayablewithdierentratesonimmovablecommercialand
noncommercialproperty,residentialats,andpurchaseofsharesofstockexchange.
WorkerProtsparticipationFund
Thistaxispaidbytheindustrialundertakinghavingmorethan10workersat5%oftheirprotsfor
Thistaxispaidbytheindustrialundertakinghavingmorethan10workersat5%oftheirprotsfor
distributionamongstworkers.Anyleftoveramountafterdistributionamongsttheworkersisdeposited
withthegovernmenttobecomepartoftheWWF.
CustomDuties
CustomsdutiesareleviedthroughCustomsAct,1969ongoodsimportedintoPakistan.Itcontributes
24.4%intheindirecttaxesand15%intotaltaxescollectedbyFBR.Thecollectionofcustomdutiesis
importantasitalsocontributesinthebasecalculationofothertaxeslikesalestaxonimportsand
withholdingtax.Only15majorcommoditygroupscontributed78%ofthetotalcustomsdutiesduring
200708.Autosectoristhetopcontributorofthecustomsduty.Thecompositionofgrosscustomsduty
collectionisprovidedasfollowing:
1.ImportDuties
2.WarehouseSurcharge
3.ExportDevelopmentSurcharge
4.Misc(auctions,recoveryofarrears,defenseetc)
FederalExcise
FederalExciseDutiesareleviedondomesticproduction,importsandservicesrenderedinthecountry.
Themajorexcisablecommoditiesincludecigarees,cement,beverages,naturalgasandPOLproducts,
whereasexcisableservicesare;AirTravel,Insurance,NonFundServicesprovided(InFY:200708the
NFSwereextendedtofullcoverageofNonfundFinancialServices(NFS),andFEDonAirTravelwas
rationalized.)bybankingornonbanknancialcompaniesandFranchiseservices.TheoldCentral
ExcisesAct,1944hasbeenreplacedbyTheFederalExciseAct,2005,witheectfrom1stJuly,2005.As
partofbudgetarymeasuresfortheyear200708,SpecialFEDat1%hasbeenleviedongoodswhichare
manufacturedorareimportedinPakistan.
SalesTax
Salestaxisliableonsalesofallgoodsandservicesproducedinthecountryexcludingthosegoods
exemptedintheSalesTaxAct,1990.Theratestructurewasdierentfornativeproductsandimports.
Thedetailsofsalestaxcollectionatimportstagealsopointoutthehigherconcentrationasfteenmajor
commoditygroupshavecontributedaround87%oftotalST(imports)collection.Themajorcommodity
groupsincludePOLProducts(27),EdibleOil(15),Plastic(39),VehiclesandParts(87),IronandSteel
(72),MechanicalMachinery(84),ElectricalMachinery(85),OrganicChemicals(29),Paper&PaperBoard
(48),Oilseedsetc(12),MiscChemicalsProducts(38),Rubber(40),Coee,Tea,andSpices(9),Aluminum
Products(76)andArticlesofIron&Steel(73).
ProvincialTaxes
(hps://pakistaneconomy.les.wordpress.com/2010/01/53.jpg)
Conclusion
Inabovementioneddirecttaxcaptionyoumusthavebeennoticedthatthereisnowealthtaxwhichis
thoughtprovoking.Ithasbeenstoppedsince2007.Wealthtaxfor200607wereRs47m.WillDurant
rightlysays;
Ifoureconomyoffreedomfailstodistributewealthasablyasithascreatedit,theroadto
dictatorshipwillbeopentoanymanwhocanpersuasivelypromisesecuritytoall?
Oneoftheprimarymaximsoftaxationisthat,theburdenoftaxshouldfallonthepeopleaccordingto
theirability.ButinPakistanthecaseisoppositeIetaxedpoor,exemptwealthy.Wealthtaxisthebest
toolofcontrollingthealarmingrateofunequaldistributioninunderdevelopingeconomieslike
Pakistan.ButunfortunatelyeverynextgovernmentofPakistanstartsloadingitsbankaccountsrather
thanaddressingtherealproblemsofcountry.Gandhibrilliantlystates;
thanaddressingtherealproblemsofcountry.Gandhibrilliantlystates;
Thethingsthatwilldestroyusare:politicswithoutprinciple;pleasurewithoutconscience;wealth
withoutwork;knowledgewithoutcharacter;businesswithoutmorality;sciencewithouthumanity;
andworshipwithoutsacrice.
References:
hp://www.nance.gov.pk(hp://www.nance.gov.pk)
hp://www.r.gov.pk(hp://www.r.gov.pk)
StatebankofPakistan
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14responsestothispost.
PostedbyJeR05onJune1,2010at6:18am
Iagreewithmostofwhatissaidhere.
i
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PostedbyHizextimeonJune8,2010at8:35pm
Justwanttosaywhatagreatblogyougothere!
Ivebeenaroundforquitealotoftime,butnallydecidedtoshowmyappreciationofyourwork!
Thumbsup,andkeepitgoing!
Cheers
Christian,EarnFreeVouchers/Cash
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PostedbyPerryEstelleonOctober27,2010at6:49am
notmanyplaceswereyoucanndthismuchcontentandvaluableinformation,thankyouforthis
post
Perry
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PostedbyHassanzakionNovember27,2010at11:27am
thaxman.veryinformativeandtothepoint
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Postedby2010inreviewPakistanEconomysBlogonJanuary2,2011at11:24am
[]TaxesinPakistanJanuary20104comments4[]
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PostedbysaraonFebruary18,2011at2:29pm
Thankyousir!thisbloghasdonewondersforme!
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PostedbyhajraonFebruary19,2011at6:04pm
thnxalot..greatblogiwasverytensdabtmyassigmntandthenigotalotofinfofrmthere
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PostedbyMahnoorAsimonFebruary7,2012at9:38am
Splendidblog..reallyverymuchinformative..
i
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PostedbyaafaqonFebruary22,2012at11:52pm
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PostedbyaafaqonFebruary22,2012at11:52pm
thatisgoodandreliableinformationbutiwantwhypeopledonotpaytaxbecausetheyalreadypay
taxintheformforindirecttax.
i
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2
PostedbyZainonNovember16,2012at11:29am
outstandingblog,thereasonfornotpayingtaxes,becausetherearemanycurruptionsinour
country,whensome1ispayingtaxjustthinkingofthattheirsafetyandimprovementinour
country,butasweallknowthatthereisnoimprovementinourcountryasmuchaswethink,somay
beitsonereasonfornotpayingtaxes
i
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PostedbyShahjahanMengalonAugust30,2014at9:15pm
kindlywrite6typeofprovincialtaxeswithbriefdescription,iamindireneedofit
i
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PostedbySeHaronJanuary13,2015at2:45pm
Idntlikethispostthatmuch..
Because,localtaxesandprovincialtaxesismissinghere._
i
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PostedbysaimahonMay18,2015at9:20pm
IjustwanttosayThankyouverymuch.Thatwasveryinformativewithsomeheart.
i
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PostedbyInstaforexonJune21,2016at5:55am
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